easyJet plc Annual Report and Accounts 2023

MAKING

LOW-COST

TRAVEL EASY

Annual Report and Accounts

2023

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

CONTENTS

WELCOME

to our Annual Report and

Accounts 2023

FINANCIALS

Independent auditors’

report to the members of

easyJet plc

136

Consolidated financial

statements

142

Notes to the financial

statements

147

Company financial

statements

189

Notes to the Company

financial statements

191

Five-year summary

194

Additional information

Glossary – Alternative

performance measures 195

Glossary 197

Shareholder information

198

Our purpose framework

Sustainability

CEO review

GOVERNANCE

Chairman’s statement

Governance highlights

Our activities in the year

Understanding the

business and culture

Ensuring effective

governance

Engaging with stakeholders

Committee reports

100

Directors’ remuneration

report

113

Other disclosures

131

Statement of Directors’

responsibilities

135

Further reading

For more information, visit

our corporate website:

corporate.easyJet.com

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this, see page 198.

STRATEGIC REPORT

At a glance

Chairman’s statement

Highlights

CEO review

Our purpose framework

Winning for our customers,

our shareholders and our

people

Our strategy in action

Our net zero roadmap

Business model

Market review

Key performance indicators

Financial review

People and culture

Sustainability

Task Force on Climate-

related Financial Disclosures

Sustainability Accounting

Standards Board (SASB)

Index

Risk management

Going concern and

viability statement

Non-financial and

sustainability information

statement and S172 statement

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

AT A GLANCE

1 OR 2

Core market positions

Countries

1,018

Routes

155

Airports

73%

Customer satisfaction

336

Number of aircraft

1) As served over the financial year ending 30 September 2023.

2) Number one low-cost carrier in the core markets of the UK,

France and Switzerland, where a carrier has >10% of market share.

WHAT WE DO

OUR PURPOSE

We are a low-cost, European,

point-to-point airline.

We use our cost advantage,

operational efficiency and leading

positions in primary airports to

deliver low fares from these

airports – making great value

travel accessible for everyone.

We aim to provide simple,

convenient travel and holidays

at a competitive price with

outstanding customer service.

Making low-cost travel easy.

Read more on page 8

KEY FACTS

FLEET DETAILS

Aircraft in the fleet

at 30 September 2023

Total Owned Leased

A319 95 29 66

A320 172 103 69

A320neo 54 47 7

A321neo 15 4 11

TOTAL 336 183 153

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

CHAIRMAN’S STATEMENT

2023: A YEAR OF

ACHIEVEMENT

STEPHEN HESTER

Chairman

The 2023 financial year was one of considerable

accomplishment at easyJet. We made important

progress on our strategic framework, on the

operational resilience so necessary in a

constrained aviation environment, and on the

balance sheet strength to underpin future growth

and risk management. Of particular note was

strong financial delivery, including record profits in

the second half of the year, and the return to

dividends we propose.

However, no review of the year is possible without

a discussion of the external environment. The

world is full of challenges and difficult problems,

ranging from the appalling human tragedies

ongoing in Ukraine and more recently in the

Middle East conflict, to the economic costs of

tackling inflation and post-pandemic supply

bottlenecks, alongside the stresses of a long-

coming normalisation of interest rates. The airline

industry has substantial exposure to these

challenges, ranging from operational impacts on

a complex schedule, to jet fuel and exchange rate

price volatility, and most important of course, the

health of passenger demand.

Our thoughts and profound sympathies go out to

all those so cruelly affected by conflicts they did

not seek.

However, away from the conflicts, on a medium

and long-term view I remain positive, indeed

optimistic. The world is showing its resilience, the

ability to respond and tackle challenges and for

economies to adapt to very major changes.

Employment is strong, major recessions have

been avoided to date and the striking march of

technological development shows the way for

continued human progress and prosperity. There

will be plenty of setbacks and issues to tackle, but

I am confident that easyJet can prosper over the

years to come from serving well a growing

customer demand for travel, driven by our

uniquely powerful brand and customer positioning.

The aviation industry is tricky to navigate, but we

believe we are in a good position to be successful

for our customers, shareholders, people and

broader society.

Turning to the specifics of 2023 for easyJet:

STRATEGY

We have spent considerable time honing and

updating our strategy post-pandemic. We aspire

to a position as Europe’s most loved airline,

winning for our customers, our shareholders and

our people. As a champion of low-cost, customer-

friendly travel in Europe, with unrivalled network

and positioning, we see this as a demanding but

appropriate goal. Its pillars – building Europe’s best

network, transforming revenue, delivering ease

and reliability, and driving our low-cost model –

are at the heart of what we are doing.

PERFORMANCE

Revenue for the full year increased 42% to

£8,171 million. Group headline profit before tax of

£455 million was an improvement of £633 million

versus the prior year. easyJet holidays delivered

£122 million of profit before tax, which is a very

pleasing result in what is only the second full year

of operations.

Following the achievement of easyJet’s existing

financial targets, we have set new medium-term

targets. These include a Group headline profit

before tax of £7 to £10 per seat, high teen ROCE,

Holidays profit before tax of over £250 million, and

disciplined capacity growth of around 5% CAGR to

2028. We clearly understand that in a capital-

intense industry, with some inherent volatility,

being able to achieve attractive returns on capital

lies at the heart of delivery for our shareholders.

I am confident that easyJet can prosper

over the years to come from serving well

a growing customer demand for travel,

driven by our uniquely powerful brand

and customer positioning.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

CHAIRMAN’S STATEMENT (CONTINUED)

BALANCE SHEET

Financial strength is an important attribute in this

industry, given its nature and asset intensity. As at

30 September 2023, easyJet had unrestricted

access to £4.7 billion of liquidity, in line with the

prior year, despite repaying £1.2 billion of gross

debt and the purchase of 10 aircraft during the

year. easyJet finished the year with a net cash

balance of £41 million.

This strength, reflected in the investment grade

credit ratings we hold, positions easyJet to be able

to prepare for the capex coming over the next few

years, as aircraft deliveries increase, but also

provides a base to deal with those challenges and

opportunities that the current macro-economic

environment may present.

DIVIDENDS

Given the financial performance in the 2023

financial year alongside easyJet’s strong liquidity

position, the Board is proposing an ordinary

dividend of 4.5 pence per share, amounting to

£34million, at the upcoming Annual General

Meeting. This represents 10% of the headline proft

after tax. The expectation is that this will riseto

20% of headline profit after tax in FY24, payable in

early 2025. The Board is committed tomaintaining

regular returns to shareholders, withthe level

offuture return to be assessed overthe coming

years, taking into account market conditions,

capex requirements and progress towards

theGroup’s new medium-term targets.

YOUR BOARD

I am pleased to report that your Board is

effective and is strongly focused on supporting

management through strategy development

and operational delivery. We were joined by Sue

Clark as Senior Independent Director in March,

completing the Board refresh of recent years.

SUSTAINABILITY

The airline industry as a whole has a particular

responsibility to respond effectively to the

climate-based challenges facing the world. It is

therefore important that easyJet continues to play

a positive role as a leader in mapping out the

transition towards our ultimate ambition of zero

carbon emission flying. This was set out through

our net zero roadmap, launched in September

2022. It is very pleasing that our carbon intensity

emissions for the 2023 financial year are below the

level we had set out in our net zero roadmap.

OUR PEOPLE

I am hugely grateful to our employees,

management and my Board colleagues for

theircontinued dedication and commitment to

delivering easyJet’s purpose to all stakeholders. It is

not an exaggeration to note that the last few years

have brought unprecedented stress and difficulty

to managing an airline. Johan Lundgren, our CEO, is

leading a talented team, and doing it well.

STAKEHOLDERS

There has been a constant dialogue with our

stakeholder groups throughout the year, and on

behalf of the Board, I would like to take this

opportunity to thank them for their partnership.

At the front of our minds remain our customers

and shareholders. We take very seriously the task

of serving customers well and were not content

with the impact on them of external operating

conditions this past summer. In response, we took

measures to bolster our schedule’s resilience,

ensuring we delivered a more robust and reliable

service to our customers. There is more to do.

Our focus remains firmly on providing a quality

customer experience in all areas within our control.

It is gratifying to see positive financial results, but

there is still a way to go to produce the high

performance levels that easyJet is capable of. We

are determined to deliver and demonstrate that

easyJet can be a leading airline for our

shareholders, just as we are for our customers.

There has been some criticism of rising airfares

and the unbundled pricing models of airlines like

easyJet. This ignores the fact that some 30 million

of our customers opt for the cheapest no-frills fare

option. We are committed to the highest levels of

transparency on our full range of fare bundles –

the low-cost air travel we provide remains

exceptionally good value compared to other

transport and leisure activities. And if authorities

could more effectively support reform of air traffic

routings and air traffic control reliability, there

would be substantially greater customer benefits

to come.

THE FUTURE

In December 2023, easyJet will hold a general

meeting for the proposed aircraft purchase of 157

aircraft and 100 purchase rights from Airbus.

I believe the proposed purchase is strongly in the

interests of easyJet’s shareholders as fleet renewal

reduces costs, reduces carbon intensity and is

expected to drive positive returns for the business,

forming a core part of the delivery of our strategic

objectives.

As we move forward, the Board and I will continue

to work collectively with the management team

and everyone at easyJet to progress towards the

delivery of our new medium-term targets.

Stephen Hester

Chairman

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

2023

432

2022

(208

)

8.2

5.8

2023

2022

92.6

81.5

2023

2022

2023

2022

67.2

70.4

2023

2022

89.3

85.5

2023

2022

HIGHLIGHTS

FINANCIAL HIGHLIGHTS

Profit/(loss) before tax

£432m

Revenue

£8.2bn

455

(178)

2023

2022

Headline profit/(loss) before tax

£455m

(670)

2023

2022

Net cash/(debt)

£41m

476

2023

2022

Headline EBIT

£476m

13.8

9.9

2023

2022

Headline EBITDAR margin

13.8%

NON-FINANCIAL HIGHLIGHTS

Load factor

89.3%

Seats flown

92.6m

OTP (On-time performance)

66%

emissions per passenger kilometre

67.2g

This year saw strong financial

delivery including record profits

in the second half of the year,

and the return to dividends we

propose.

Stephen Hester

Chairman

STRONG

DEMAND

UNDERPINS

GROWTH

Alternative performance measures

We use various alternative performance measures

(APMs) which we believe provide useful additional

information for understanding the financial

performance and financial health of the Group.

See the glossary on pages 195 and 196 which

provides a comprehensive list of the APMs that we

use, an explanation of how they are calculated,

why we use them and a reconciliation to the

closest equivalent IFRS measure where relevant.

Read more on pages 27 to 34

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

CEO REVIEW

MAKING LOW-COST

TRAVEL EASY

JOHAN LUNDGREN

Chief Executive Officer

easyJet achieved a record performance during

summer 2023, despite high fuel costs and the

challenges arising from the external operational

environment, thanks to initiatives implemented

over the past year and a half. Supported by strong

consumer demand and easyJet’s leading brand

position, the Company’s success is driven by the

low-risk expansion at primary airports, significant

increases in ancillary revenue, market-beating

growth for easyJet holidays and a constant focus

on cost. This led to a pre-tax headline profit of

£455 million for the 2023 financial year, an

improvement of £633 million on the previous year.

We knew there were going to be external

challenges through the year from the external

operating environment, with continued French

pension reform strikes, ongoing air traffic control

flow rate restrictions and airspace congestion. In

order to prepare for this, we started our

recruitment earlier than ever before, insourced key

processes such as ID checks, and took proactive

action through the summer season to mitigate the

impact of disruption for our customers.

It is very pleasing to have delivered our existing

financial targets in the 2023 financial year:

mid-teen EBITDAR margin, easyJet holidays to

deliver greater than £100 million of profit before

tax and a low to mid-teen ROCE. Following this, we

have set out our new ambitious medium-term

targets, with the goal to deliver greater than £1

billion of headline profit before tax. We have a

clear strategy and plan that we are working

towards which will deliver our purpose of making

low-cost travel easy, winning for our customers,

our shareholders and our people.

FINANCIAL PERFORMANCE

Total revenue saw a significant rise of 42%,

reaching £8,171 million, compared to £5,769 million

in 2022. This is primarily due to an increase in

capacity to 92.6 million seats from 81.5 million in

2022, coupled with strong ticket yield and a

continued increase in ancillary revenue generation

and the rapid growth of easyJet holidays.

Passenger Revenue Per Seat (RPS) saw a 21%

increase to £56.37, up from £46.80 in 2022. This

growth is driven by easyJet’s optimised network at

primary airports, as demand remained strong

through the year. Airline ancillary revenue per seat

also rose by 21% to £23.47, compared to £19.43 in

2022. This is a result of easyJet’s ongoing efforts

to increase conversion and revenue management,

generating additional revenue for the airline.

Group headline costs, excluding fuel, rose by 22%

to £5,683 million, up from £4,668 million in 2022.

This increase is attributed to higher capacity,

industry-wide inflation, rapid expansion of easyJet

holidays, and resilience measures implemented

ahead of summer 2023.

Headline Airline cost per seat, excluding fuel, saw

a marginal increase of 2% to £54.30 from £53.20

in 2022, aligning closely with the sector length

increase of 3%. This is despite inflation being seen

across the cost base, including within airport,

navigation and staffing expenses, and a

4 percentage point increase in load factor

observed during the year, which affects per

passenger charges within airports.

We have a clear strategy and plan

that we are working towards which will

deliver our target of making low-cost

travel easy, winning for our customers,

our shareholders and our people.

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easyJet plc

Annual Report and Accounts 2023

CEO REVIEW (CONTINUED)

easyJet holidays continues to be the fastest-

growing UK holiday company, expanding its

customer base by 77% year on year. This profitable

growth has been very pleasing to see and delivered

the Company’s existing medium-term financial

target with its £122 million of profit before tax.

This year’s Group headline profit before tax of £4.91

per seat is an encouraging first step towards our

medium-term target of £7 to £10 Group profit

before tax per seat.

OUTLOOK

The 2024 financial year has begun positively with

strong year-on-year profit growth in October and

revenue per seat on early bookings for Q2 to Q4

pleasingly ahead of last year. There’s also strong

growth in easyJet holidays’ bookings for all periods

on sale, continuing the upward trend. Consequently,

easyJet aims for continued progress towards our

medium-term profitability ambitions.

Early winter results for FY24 will see an impact

from the conflict in the Middle East, which started

on 7 October. In our planned winter schedule,

flights to Israel, Jordan (both temporarily paused)

and Egypt represented 4% of capacity and 10%

ASKs. Additionally there was a broader impact on

near term flight searches and bookings across the

industry, though this seems to be coming back

with a recent improvement in trading. Accordingly,

despite positive underlying strength, easyJet does

not currently expect its Q1 loss to improve year on

year. The present booking strength for summer

2024, coupled with supply constraints in Europe,

provide a positive outlook for the year as a whole.

MEDIUM-TERM TARGETS

easyJet has ambitious and credible medium-term

targets, that provide the building blocks to achieve

a Group profit before tax per seat of between £7

to £10. The levers to achieving this are reducing

winter losses, growing easyJet holidays to deliver

over £250 million of profit before tax and the cost

savings that our current Airbus order book will

deliver from fleet efficiency and upgauging. In

addition to the delivery of our strategy, these

targets are integral to achieving easyJet’s ambition

to deliver more than £1 billion profit before tax.

SUSTAINABILITY

There are many benefits of travel and tourism.

It connects people, countries and cultures and

supports the aspirations and livelihoods of millions

of people. If lost, it would have a devastating

global impact on economic prosperity and social

mobility. Clearly, we need to find a balance that

both lowers the impact of aviation and safeguards

these benefits. This is why we developed and

published an SBTi-aligned net zero roadmap, and

secured validation from SBTi for our interim target

of 35% greenhouse gas emissions intensity

reduction by 2035 (against a FY19 baseline).

We are collaborating in multiple cross-sector

partnerships and have invested multimillions of

pounds in the development of zero carbon

emission technology.

We are making significant breakthroughs. We

partnered with Rolls-Royce to set a world first by

successfully running a modern aero engine on green

hydrogen. A test on a key component in a Pearl 700

engine in September further proves hydrogen’s

suitability for aviation, and – in addition to continued

partnerships with Airbus, GKN Aerospace and

Cranfield Aerospace Solutions – easyJet has played

the lead role in establishing the Hydrogen in Aviation

alliance to help ensure the infrastructure and supply

exists, so we can capitalise on this opportunity when

it becomes available.

We’re also making substantial operational

efficiencies. A fifth of our fleet comprises the

highly efficient NEO aircraft and we’ve invested

heavily in state-of-the-art software to drive flight

efficiencies – all of which are contributing to

easyJet’s best-ever carbon intensity performance

in FY23.

Looking beyond our operations, we continue to

support the vital work of UNICEF and many

charitable and local community focused projects.

At the same time, easyJet holidays is working to

maximise the socio-economic benefits of tourism

to destination communities, while managing

environmental impacts.

Sustainability is at the heart of our strategy and

everyone at easyJet is dedicated to building a

sustainable and thriving aviation sector that will

serve and benefit countless generations to come.

OUR PEOPLE

easyJet continues to have a market leading

reputation as an employer of choice, as evidenced

through our Glassdoor rating of 4.2.

In a recruitment market that remains competitive,

we continue to improve how we attract and retain

diverse talent that reflects the communities we

serve. We have evolved our Employee Value

Proposition and launched a more compelling

careers website to deliver a much-improved

candidate experience and to convert more of the

interest generated by our recruitment advertising

into applications.  

When people join easyJet, our proactive and

rewarding health and wellbeing strategy

empowers them to take small, easy steps to better

wellbeing every day. By giving colleagues the

tools, support and confidence they need to take

care of themselves and each other, they will have

the energy to enable us to perform at our best

and win together.

By building an inclusive culture and living our

behaviours, we create a place where everyone can

not only be themselves but also thrive, grow to

their full potential and be at their best.

Our crew in particular have worked tirelessly

throughout the year, providing the customer

service that our customers expect and love from

easyJet. There were many unexpected challenges

during the peak summer period from wildfires in

Greece to air traffic control disruption. I would like

to commend our crew for how they managed

these challenges and to thank all my colleagues

for their contribution in the year to our record

performance.

Johan Lundgren

Chief Executive Officer

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easyJet plc

Annual Report and Accounts 2023

OUR PURPOSE FRAMEWORK

TO ARRIVE AT OUR DESTINATION OF BEING EUROPE’S MOST LOVED AIRLINE, WINNING FOR

OUR CUSTOMERS

Read more on page 9 Read more on page 10

OUR SHAREHOLDERS

Read more on pages 18 and 19

Driving our

low-cost model

Always with

safety at our

heart

Always

challenging

cost

Making a

positive

difference

Always warm

and welcoming

Living the

Orange Spirit

We are passionate about

connecting people by making

travel easy, enjoyable and

affordable for customers,

whether for leisure or business.

Our purpose defines who

we are and guides our actions

and decision making.

MAKING

LOW-COST

TRAVEL

EASY

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Annual Report and Accounts 2023

CUSTOMER PROPOSITION

WINNING FOR

OUR CUSTOMERS

Continual improvement to the

customer experience focuses first

on people-driven service, along

with foundational investments

behind a longer-term approach

that leverages technology.

This includes investing in ‘brilliant

basics’ – with the aim of making

communication, boarding, bag

drop, the inflight experience and

disruption service recovery as

easy as possible. Our people are

key to improving customers’

experience and we are building

the Orange Spirit through

enhanced customer service

training and incentive

programmes for frontline staff.

Making our customers’ travel

experience even easier will

comethrough the application

ofconnected technology to

create an easier travel experience

across every stage of the journey

through further development of

the industry-leading easyJet app.

Customers respond positively to

our proposition, with 78% of seats

in FY23 booked by returning

passengers. We are seen as the

number one in providing value for

money in core markets – the UK,

France and Switzerland – and

94% of easyJet’s target audience

in the UK would consider flying

with easyJet this summer.

Overall customer satisfaction in

FY23 remained level at 73%

despite higher volumes of

disruption compared to FY22.

To be Europe’s most loved airline, we win for

customers by offering an unbeatable network and

delivering value through a best-in-class customer

experience at competitive prices.

1) Brand consideration and value perceptions are from our new brand tracker with

Delineate launched in June 2023.

2) This figure denotes the percentage of customers who said they were completely, very or

quite satisfied with their experience in the easyJet internal On The Day survey conducted

by KPMG. In FY23, we changed our customer satisfaction measurement platform;

therefore, all previous scores have been normalised for comparison.

Read more on pages 16 and 17

CASE STUDY

Delivering

ease and

reliability

In 2023, we introduced a

specialised customer chat

feature to provide

personalised support and

improve our operational

efficiency. Our goal was to

upgrade our virtual adviser

(chatbot) to autonomously

handle common inquiries and

seamlessly transfer to human

agents when necessary. Live

chat became our primary

contact channel at the end of

2023. This transition has led

to both improved customer

engagement and enhanced

operational efficiency. We

have begun deploying the

use of generative AI to create

further efficiencies and

engagement enhancements

in customer interactions and

have deployed a development

team to scale these solutions

based on early success.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

SHAREHOLDER PROPOSITION

WINNING FOR

OUR SHAREHOLDERS

Our strategic priorities — building Europe’s best

network, transforming revenue, delivering ease

and reliability, and driving our low-cost model —

will deliver shareholder value over the long term.

We have set ourselves ambitious

new medium-term targets which

provide us with the building

blocks to achieve our ambition

of making a profit before tax of

greater than £1 billion.

A continued disciplined approach

will be taken to managing the

business through ensuring we

are utilising our assets to generate

the best returns from the capital

we employ.

We will grow where it makes

sense and we have identified

the right opportunities to do so,

supported by our investment-

grade balance sheet – one of

the strongest in the industry.

Our decision to reinstate the

dividend demonstrates our

commitment to both growth

and shareholder returns.

For more on our

work for investors visit

corporate.easyJet.com/

investors

Read more on pages 27 to 34

MEDIUM-TERM TARGETS

£7–10

Group PBT per seat

HIGH

TEEN %

ROCE

>£250M

Holidays PBT contribution

1) ROCE is calculated by taking headline profit/(loss) before interest, foreign

exchange gain/(loss) and tax, applying tax at the prevailing UK corporation

tax rate at the end of the financial year, and dividing by the average capital

employed. Capital employed is shareholders equity, excluding the hedging

and cost of hedging reserves, plus net debt.

2) Capacity growth between 2023 and 2028.

Capacity growth CAGR

C.5%

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easyJet plc

Annual Report and Accounts 2023

PEOPLE PROPOSITION

WINNING FOR

OUR PEOPLE

Our people help us to win for our

customers and we aim to provide

an experience that sets us apart.

With 82% of our colleagues in

customer-facing roles, our people

are one of our key differentiators.

Our People strategy is focused on

four key elements: enhancing our

culture; future-proofing our

capability; continuously improving

our ways of working; and

optimising productivity though

world-class organisational

effectiveness.

We strive to ensure that our

people are proud of the

organisation they work for,

connected to our purpose, set up

for success and empowered to

make a difference. They aren’t

just employees, but brand

advocates who give our

customers a compelling reason

to choose to fly with us.

We are setting our colleagues up

for success by giving them the

tools that make it easy to win. A

continued focus on developing

our colleagues, and retaining and

attracting the best talent, will

ensure capability within the

organisation is future-proofed.

We continue to build a high-

performance culture that allows

the Orange Spirit to thrive by

engaging and inspiring our people

to stride towards a common goal.

Our purpose is clear and our destination is well

understood, to be Europe’s most loved airline.

Winning for our people is a key leg of the journey.

Read more on pages 35 to 38

CASE STUDY

living the

orange

spirit

Pam Clark, our oldest

employee at the age of 73,

is flying high as easyJet cabin

crew. It was on an easyJet

flight to Madrid 20 years ago

that former hairdresser Pam

picked up a recruitment ad

and was inspired to make her

childhood dream come true.

With two decades of loyal

service with easyJet, Pam

has welcomed an estimated

800,000 passengers on

board 4,500 flights. Now

she is encouraging others

to follow in her footsteps

and consider an exciting

new career as cabin crew –

no matter their age.

When I applied for the role 20 years ago, I knew

that my age and experience meant I had something

really valuable to offer. My favourite part of the job

has been meeting passengers from all over the

world and giving them the most enjoyable travel

experience possible. I’m proud to work at a

company that puts people first.

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Governance Financials

easyJet plc

Annual Report and Accounts 2023

OUR STRATEGY IN ACTION

BUILDING

EUROPE’S

BEST NETWORK

OVERVIEW

Lead and build scale in

our core markets

Maintain and build leadership

positions in slot-constrained

airports

Accelerate investment in

destination bases

Additional expansion

when opportunities arise

CASE STUDY

Lisbon is a highly slot-constrained

airport and last year we were

delighted that the European

Commission awarded 18 daily

slots at the airport to us, as they

were impressed with our plans to

use the slots and grow at the

airport. We began to operate

these slots at the start of this

financial year and the increase

increased operations

in Lisbon

in flight frequencies and

destinations we can now offer

our customers has moved us

into the number two position

at this airport.

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OUR STRATEGY IN ACTION (CONTINUED)

BUILDING EUROPE’S BEST NETWORK

Our network of number one and two positions

at primary European airports is unique and

gives easyJet an advantage that another

airline would find hard to match.

UNRIVALLED NETWORK USING

SOUGHT-AFTER AIRPORTS

Our network strategy gives us a

competitive advantage. We are

building our strength at Europe’s

most popular airports with large

catchment areas, increasing

opportunities at the most

slot-constrained airports where

our returns are highest. More

flights and a wider range of

destinations in these airports

provide customers with the best

choice and value when compared

with our competitors.

For example, since 2019 we have

added capacity into Portugal

equivalent to 11 aircraft. This has

resulted in us moving into the

number two position in both

Lisbon and Porto where we were

previously the number three

carrier, building scale and breadth

of offering to our customers in

this market.

PROGRESS IN FY23

> Operated additional slots at

Porto and Lisbon which we

were awarded in 2022.

> Greek islands: easyJet

continued to be the largest

carrier there this summer.

> Rightsized our operations in

Berlin, where we now have

11 aircraft based and the

returns have improved to be in

line with our network average.

> Growth in UK regions with

capacity increases compared

to FY22 of: Edinburgh 30%,

Bristol 28%, Manchester 26%

and Liverpool 20%. These

capacity increases also

enabled an improved product

offering, with a total of 26 new

routes added into the UK

regions, including seven new

routes at Manchester and four

new routes at Glasgow,

broadening the choice for our

customers.

PROPOSED AIRCRAFT ORDER

easyJet recently announced that

it has entered into conditional

arrangements with Airbus to

secure the delivery of a further

157 aircraft (56 A320neo and 101

A321neo) between FY29-34 as

well as 100 purchase rights. This

provides easyJet with the ability

to complete its fleet

replacement programme of

A319 aircraft and replace

approximately half of the older

A320ceo aircraft, alongside

providing the foundation for

disciplined growth. This

proposed order secures scarce

order book positions, enabling

the ongoing renewal of the fleet

to continue. A younger, more

technologically advanced fleet

will deliver substantial fuel and

carbon efficiencies, helping to

deliver our net zero pathway and

drive improved profitability. The

new aircraft also have more

seats than the aircraft they are

replacing and, as noted, this

upgauging helps to increase

capacity without the need to

acquire additional slots, which

can further improve overall

profitability per seat.

This proposed order is a

significant step in assuring the

trajectory of the business and

ensuring that easyJet has

capacity available to implement

its strategy between 2029 and

the mid-2030s.

In view of the size of the order,

shareholder approval is required

in order for easyJet to proceed

and a separate circular has been

issued to shareholders

containing the full details of the

proposed transaction.

FY24 INITIATIVES

> Strengthening the UK regional

market with more aircraft

being added into Manchester,

Bristol and Liverpool.

> Creating new bases for FY24

at Birmingham and Alicante,

with three aircraft to be

located at each base.

> Adding aircraft into

Switzerland, providing

customers with additional

choice for skiing and other

winter sports.

> Increasing capacity over the

winter season (H1) with c.15%

capacity growth focused

across 10 key routes,

unlocking productivity gains

for pilots, cabin crew and

aircraft. Beach capacity will be

increased by around 20% as

we expect people to seek

winter sun, particularly in the

Canary Islands and Egypt. We

are also increasing capacity to

city destinations by 16% as

city breaks and business travel

continue to recover.

> Aircraft deliveries scheduled

for FY24 will continue the

process of upgauging, as the

new aircraft are larger and

have more seats than the

aircraft they are replacing.

> We expect capacity growth of

c.5% per annum on average

(CAGR) between 2023 and

2028.

RELEVANT RISK THEMES

> Safety, security and

operations

> Asset performance

> Macro-economic and

geopolitical

Read more on our principal risks on

pages 61 to 66

This is a great example of how we

can grow by taking advantage of

opportunities as they arise at

slot-constrained airports. The

table below also shows how since

2019 we have increased our focus

on constrained airports where we

achieve the highest returns.

LEAD AND BUILD SCALE IN

OUR CORE MARKETS

We have many opportunities to

grow in our core markets. Larger

aircraft will provide 6% growth in

capacity by 2028, as they enable

us to increase our overall share

of passengers in core slot-

constrained airports without

obtaining additional slots. We will

also expand our existing markets.

The regional market in the UK

has performed extremely well

and we will be adding aircraft to

Manchester, Birmingham, Bristol

and Liverpool to take advantage

of rising demand.

2) Leadership position = number one or number two.

Leadership position

in 8 of Europe’s 30

largest airports

Leadership position

in 13 fully constrained

airports

Bases

Destinations

OUR NETWORK

Capacity %

2023 2019 Delta

Fully constrained 42% 37% +5ppts

Constrained at peak times 39% 30% +9ppts

Other 19% 33% -14ppts

1) Capacity (by calendar year) originating from constrained airports – IATA level 2

or level 3 definition.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

Maximise the revenue

potential of our market

Transform our ancillary

revenue capability

Diversify our sources of

revenue, continuing to

focus on easyJet holidays

TRANSFORMING

REVENUE

OVERVIEW

CASE STUDY

easyJet holidays is going from

strength to strength, with a

77% year-on-year growth in

customers taking advantage of

a fantastic range of holidays at

consistently lower prices than our

competitors. Our share of the UK

market has doubled year on year,

reaching 5% in 2023 with

customers reporting exceptional

levels of satisfaction, with a

customer score of 83%.

This all amounts to £122 million

headline profit before tax

delivered for FY23.

Competitive pricing underpins

the growth – we keep the fixed

costs as a percentage of revenue

as low as possible, lower than our

fastest growing holidays

business in the UK

major rivals. And this pays off for

customers, our prices are

cheaper 70% of the time.

The next phase of our growth

plan includes doubling our UK

market share to 10%, by

introducing new destinations

and products, and growing the

leisure and city break sector.

77%

easyJet holidays year-on-

year customer growth

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easyJet plc

Annual Report and Accounts 2023

Example booking curves

100%

80%

60%

40%

20%

-10 10 30 50 70 90

Days before departure

Load factor

110 130 150 170 190 210

Later

booking

proﬁles

(e.g. city

and domestic

routes)

Earlier booking proﬁles

(e.g. leisure and beach routes)

OUR STRATEGY IN ACTION (CONTINUED)

TRANSFORMING REVENUE

Continuing to develop and build on our

exceptional revenue performance is a key

element of our strategy, ensuring we maximise

the revenue potential of the market.

This involves investing in our revenue

management capability, developing new

industry-leading ways of leveraging data,

and optimising ticket and ancillary revenue.

We are transforming our ability to develop new

ancillary revenue product for our customers

based on their specific needs and we will also

continue to diversify our sources of revenue

with an ongoing focus on easyJet holidays.

Additional airline ancillary

revenue compared to 2019

£1bn

Ancillary revenue as a

proportion of airline revenue

29%

PROGRESS IN 2023

Over the last four years we have

transformed our ancillary

proposition and this has provided

a step change in revenue

generation. We are giving

customers more choice and they

are responding well to further

unbundling, such as enabling

them to book a seat without

having to book a large cabin bag.

Our customers only have to pay

for ancillary products that they

want, rather than having

products that they don’t want

included in the price of the ticket.

Airline ancillary revenue in the

current financial year was

£2.2 billion, an increase of 37%

compared to the prior year, and

29% of the airline’s revenue now

comes from the sale of ancillary

products.

We believe there is scope for

further revenue generation from

the pricing algorithms we have

developed which we are

continuously evolving and which

are used to apply dynamic pricing

to both tickets and ancillary

products. The data science team

which develops and refines these

algorithms is embedded within our

revenue management team to

ensure we prioritise development

where it will enable us to maximise

our return.

The algorithms will balance how

rapidly flights are selling against

the benefit of flying full and price

seats to maximise revenue.

Different types of routes have

different booking curves: leisure

routes tend to get booked earlier,

while city routes sell much nearer

departure (see graphic above).

In addition, easyJet’s in-flight retail

brand and proposition, which

launched last year, is delivering

growth across all KPIs and is

allowing us to tailor our product

offering to our customers. This

has been a real success and we

have increased spend per seat by

17% to £2.12 and profit per seat by

42% to £0.60. We are planning to

deliver over £1 profit before tax

per seat over the medium term.

In addition to the development of

ancillary revenue, we are also

benefiting from the growth of

easyJet holidays. This year it has

performed strongly, contributing

incremental revenue of £776

million to the Group and

generating £122 million profit from

1.9 million passengers (including

agent commission passengers).

FY24 INITIATIVES

> We are planning further growth

of easyJet holidays. Having

achieved our original target for

easyJet holidays, of profit before

tax in excess of £100 million, we

have now set ourselves a new

target for easyJet holidays to

achieve profit before tax of

£250 million in the medium

term. The next phase of our

growth plan includes doubling

our UK market share to 10% by

introducing new destinations

and products, and growing the

leisure and city break sector. We

will look to convert as many of

our airline passengers as

possible into easyJet holidays

customers, and one key

advantage of our holidays

business is that it has no

constraints on growth. easyJet

holidays recently launched into

Switzerland so there will be a

focus on growing this market in

2024, and expansion into other

markets in Continental Europe

will also be explored.

> We will focus on the

continued development of our

in-flight retail offering to make

it even more attractive to our

customers and to drive

towards delivery of our

medium-term target of £1

profit before tax per seat.

Enhancements being

assessed include the

introduction of closed-loop

wi-fi to facilitate an enhanced

in-flight retail experience by

enabling customers to browse

the product offering with

latest prices on their phone

and to order to their seat.

Similarly, we will also assess

the development of pre-order

capability for in-flight retail for

food, drink and Duty Free.

RELEVANT RISK THEMES

> Technology

> Macro-economic and

geopolitical

Read more on our principal risks on

pages 61 to 66

We believe there is

scope for further

revenue generation

from the pricing

algorithms we have

developed which we

are continuously

evolving.

1) Calculated as increased ancillary

revenue per seat FY23 versus FY19,

multiplied by seats flown FY23.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

OUR STRATEGY IN ACTION (CONTINUED)

DELIVERING

EASE AND

RELIABILITY

80%

Use of our disruption

management tool

of those disrupted used the

disruption management tool

We have further enhanced the

functionality of our disruption

management self-service tool

(SSDM) this year to make it even

easier for customers to make

changes when disruption does

occur. Customers are now able

to use the SSDM to select

alternative flights and to book

hotels if accommodation is

required, or to request either

vouchers or a refund. This year,

80% of customers made use of it.

OVERVIEW CASE STUDY

self-

service

tool

Provide an easy and reliable

customer experience

Protect and build on easyJet’s

strong brand

Grow and deepen relationships

with our customers

Establish sustainability

leadership

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

OUR STRATEGY IN ACTION (CONTINUED)

DELIVERING EASE AND RELIABILITY

Giving customers an enjoyable, hassle-free experience

and reliable service that makes them want to fly with

us again will always be one of the key cornerstones of

our strategy. Ease and reliability is at the centre of our

purpose to make low-cost travel easy.

In preparation for the summer

2023 season, we recruited more

crew than ever before, onboarding

them ahead of summer to ensure

we were fully prepared.

Unfortunately, despite easyJet

being fully prepared for this

summer, we saw operational

challenges outside of our

control, in particular with air

traffic control (ATC), which was

the single biggest source of

delays this year across the

network and more specifically at

Gatwick. We continued to take

proactive action throughout the

summer to manage in this

challenging operating

environment. As a result, to

tackle this, we consolidated

flights in the middle of the day

at Gatwick to create ‘firebreaks’

in our schedule to minimise the

knock-on effects from delays

to aircraft in the morning.

Congested airspace from the

continued invasion of Ukraine,

French ATC strikes, the impact

of NATS staff shortages in the

control tower at Gatwick and

weather-related disruption all

drove operational challenges

in 2023.

We aim to deliver a seamless

and digitally enabled customer

journey at every stage and we are

working continuously to enhance

the customer experience,

particularly at the airport.

Sustainability continues to be a

priority for easyJet and our

customers, and our net zero

roadmap demonstrates our

commitment to leading in this area.

easyJet has a loyal customer

base, with 78% of seats booked

by returning customers, as our

crew provide the warmest

onboard experience. The latest

brand tracker

confirmed our

number one position in our core

markets when it comes to value,

which is all the more important at

a time when consumers’

disposable income continues to

be squeezed.

PROGRESS IN FY23

> Self-service disruption

management tool

functionality enhanced during

the year, improving the

experience for our customers.

> Our in-house team processed

employment reference checks

more quickly and we recruited

more crew than ever before.

> We aspire to lead the way on

the sustainability agenda, and

we were very proud to win the

2023 UK Green Business

award for ‘Net Zero Strategy

of the Year’.

> Launched the Hydrogen in

Aviation alliance alongside

Rolls-Royce, Airbus, Ørsted,

GKN Aerospace and Bristol

Airport. We expect this alliance

to be critical in bringing

together major players across

the aviation and energy sectors

to accelerate the delivery of

zero carbon aviation.

FY24 INITIATIVES

> Recruitment of cabin crew

and pilots for the 2024

summer season to take place

early again. Recruitment is

already underway for the

1,100+ cabin crew and c.500

pilots that we need for the

2024 summer season. We

have already received over

13,000 applications for cabin

crew and have recruited over

35% of our target, with training

scheduled from November

2023 to January 2024. We

have also recruited over 50%

of the pilots we require.

> Encouraging Gatwick to build

more resilience by increasing

staffing levels in the control

tower. ATC was the single

biggest source of delays this

year and the Gatwick tower,

operated by NATS, particularly

struggled to cope with staff

shortages, leading to

restrictions on the aircraft

numbers which Gatwick could

handle over a sustained period.

We have been engaged in

dialogue with Gatwick Airport

since this issue started to have

a significant detrimental

impact, and have stressed the

importance of improving their

resilience to reduce disruption

and minimise the negative

impact on customers’ travel

plans. In the meantime, we

continue the ongoing work to

improve our customer

experience at Gatwick as with

all other airports.

> Supporting Rolls-Royce’s

research into hydrogen engine

development. Our

groundbreaking partnership

with Rolls-Royce aims to

pioneer the development of

hydrogen combustion engine

technology. In November

2022, we set a new aviation

milestone with the world’s first

run of a modern aero engine

using hydrogen, and in

September 2023, we

successfully tested a

combustor, a key engine

component. The ground

testing continues through

FY24, with a longer-term

ambition to carry out flight

tests. See page 48 for more

details of this and other

hydrogen aircraft partnerships

we are involved in.

RELEVANT RISK THEMES

> Safety, security and

operations

> Asset performance

> Our people

> Environmental sustainability

> Technology

Read more on our principal risks on

pages 61 to 66

Airline customer

satisfaction score

73%

INDUSTRY LEADING CUSTOMER PERCEPTION – #1LCC

UK FRANCE SWITZERLAND

Delivering on value #1 #1 #1

Brand awareness #1LCC #1LCC #1LCC

Delivering on network #1LCC #1LCC #1LCC

Delivering on reliability #1LCC #1LCC #1LCC

Making travel easy #1LCC #1LCC #1LCC

1) Number one low-cost carrier in the core markets of the UK, France and

Switzerland, where a carrier has >10% market share.

Source: Delineate Brand Tracker (August 2023)

2023 Rolls-Royce

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

DRIVING

OUR LOW-

COST MODEL

OUR STRATEGY IN ACTION (CONTINUED)

In recent years we have

insourced line maintenance at

several locations, enabling us to

have greater control over

maintenance, reducing costs

incurred and improving the

quality of the maintenance

fulfilled.

Our most recent development

was the opening of our Berlin

maintenance hangar in January

2023. This c.10,000 square-

metre facility had 107 full-time

engineers and other staff in

September 2023, and in the time

since it opened has dealt with

367 maintenance events, an

average of 41 per month. This is

expected to rise to c.60 per

month in 2024. We have seen an

average cost saving of 38% per

aircraft visit to date.

OVERVIEW

Drive our business with

sustainable efficiency

Invest in our fleet

Optimise our capital efficiency

Deliver strong productivity

CASE STUDY

Insourcing

line

maintenance

38%

Cost saving per aircraft

visit to date

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

OUR STRATEGY IN ACTION (CONTINUED)

DRIVING OUR LOW-COST MODEL

Disciplined implementation of our low-cost model

underpins all elements of the easyJet strategy:

> A highly efficient point-to-point network delivering

simplicity in operations and scale within airports.

> Providing disaggregated products and relevant

bundles of products, allowing customers to pay

for what they value.

> Ensuring we have a fleet with exceptional fuel

efficiency and low maintenance costs.

And most importantly, it means always challenging

cost, ensuring that where easyJet spends it delivers

tangible value to our customers. Alongside a focus

on productivity and investing in processes and

tools which deliver truly sustainable long-term

cost efficiency.

Upgauging the fleet will help us

to keep costs per seat down, as

the fixed costs involved with

flying an aircraft are spread over

a greater number of seats. Our

average gauge is expected to

increase from 179 at September

2023 to above 190 in FY28. This

will give us a cost-saving per

seat of greater than £3, which is

a benefit that no other European

airline has on this scale over the

next five years.

The capacity we are adding in the

FY24 winter season will help to

drive aircraft utilisation

improvements of 12% year on

year. Pilot productivity is expected

to go up by 9% and crew

productivity by 6% year on year.

The productivity and utilisation

benefits that we expect to see as

a result of this increased capacity

mean that we expect our cost per

seat excluding fuel over the

forthcoming winter season to

> Descent Profile Optimisation

is software which reduces the

amount of fuel used on

landing an aircraft by plotting

a more fuel-efficient descent.

It is estimated that this saves

at least 50kg of fuel per flight.

easyJet now has the largest

fleet in the world equipped

with this technology. See

page 44 for full details.

FY24 INITIATIVES

> Our overall ambition for the

forthcoming financial year is

to ensure that our cost per

seat (excluding fuel) is flat

year on year. We aim to

achieve this through our

continued focus on making

cost savings through

efficiencies and procurement

savings that do not jeopardise

the quality of our service

offering, combined with larger

initiatives such as those

described below.

> Delivery of 16 NEO aircraft

scheduled for FY24,

comprising 15 A320s and an

A321 NEO aircraft typically

deliver at least a 15% boost

in fuel efficiency and therefore

help to keep our overall fuel

costs down, as well as

producing significantly

lower carbon emissions

and being quieter.

> Assessing the opportunity

to insource more line

maintenance across the

network: in recent years

we have insourced line

maintenance at Gatwick,

Glasgow, Edinburgh, Bristol

and most recently Berlin with

great success, delivering lower

cost and a better quality

service. We are actively

assessing where we might

be able to deliver further

insourcing in FY24.

> Exploring the use of AI

technology to improve

efficiency and reduce costs:

we have already introduced

a generative AI solution to

manage customer queries,

which has led to a 50%

reduction in response

processing times and a 30%

reduction in the processing

cost of each email received.

Our teams are exploring other

ways in which we can utilise

data to drive efficiency across

the business.

RELEVANT RISK THEMES

> Asset performance

> Environmental sustainability

Read more on our principal risks on

pages 61 to 66

Delivery of new

A320neo family

aircraft in the year

Expected average

gauge by FY28

190+

Our low-cost model

means always challenging

cost, ensuring easyJet

delivers tangible value

to our customers.

reduce year on year, and to be flat

across the FY24 year as a whole.

PROGRESS IN FY23

> Fleet renewal continues

with the delivery of 10 new

A320neo family aircraft in

the year.

> Insourcing maintenance in

Berlin with the opening of a

new hangar.

> Functionality of our self-service

disruption management tool

enhanced during the year, with

the result that 80% of

disrupted passengers now use

the tool when disruption

occurs. This reduces the

volume of calls which our call

centre operatives need to

handle, meaning shorter wait

times for those customers who

do call and reduced costs

overall to manage disruption

when it occurs.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

OUR NET ZERO ROADMAP

Sustainable Aviation Fuels (SAF)

Operational efficiencies

Airspace modernisation

Zero carbon emission aircraft

Fleet renewal with NEO aircraft

35% 78%

versus 2019

BY 2035

WE ARE COMMITTED TO

REDUCING OUR GHG EMISSIONS

INTENSITY BY

BY 2050

WE AIM TO BE NET ZERO,

REDUCING OUR CARBON

EMISSIONS INTENSITY BY

Our validated science-based target, a 35%

carbon emissions intensity improvement by

2035, is benchmarked against a 2019 baseline.

Since 2000, over a 20-year period, we have

already reduced our carbon emissions per

passenger per kilometre, by one third.

DRIVERS OF

2035 INTENSITY

REDUCTION

DRIVERS OF

2050 INTENSITY

REDUCTION

We will

address

residual

emissions

through

carbon

removals

2023

PIONEERING

FUTURE TRAVEL

20%

Fleet is now over 20%

NEO following the delivery

of our 69th aircraft

332

Successfully installed Descent

Profile Optimisation (DPO) on

332 aircraft, making easyJet

the largest worldwide operator

of DPO-enabled aircraft

67.2g

Achieved our lowest CO

intensity ever,

67. 2g CO

/Revenue Passenger Kilometre

easyJet entered in to a

sustainability-linked loan based

on our net zero roadmap. Read

more on page 99

Current position:

exceeding targets

We’re pioneering positive change for our

planet, communities and people. Getting

one step closer to net zero every day.

2022 20302025 20402035 2045 2050

200

400

800

1,000

600

Our emissions intensity in grams CO

e per revenue tonne kilometre

2023 2024

easyJet plc commits to reduce well-to-wake GHG emissions related to jet fuel from owned and leased operations by 35% per Revenue Tonne Kilometre (RTK) by FY35 from a FY19 base year. The target boundary includes

biogenic emissions and removals from bioenergy feedstocks. Based on SBTi Aviation Sectoral Decarbonisation Pathway for a well below 2°C scenario, read more on page 56.

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Governance Financials

easyJet plc

Annual Report and Accounts 2023

HOW WE PLAN

TO ACHIEVE

NET ZERO

2050

Reduce

Replace

Remove

Airspace modernisation

10% reduction by 2035 through

Single European Sky and

modernisation of UK airspace

> Advocating for change

by decision makers

Operational efficiencies

Fuel saving through initiatives

including single engine taxi

and engine washing

> SkyBreathe fuel

management tool

> Descent Profile Optimisation

Carbon removal

Residual emissions will be removed

to reach net zero by 2050

> Agreement signed with Airbus

and 1PointFive for Direct Air

Carbon Capture and Storage

credits

Fleet renewal with NEO

Minimise fuel burn and

emissions through current

technology

> 158 NEO aircraft to

be delivered by 2029

Sustainable Aviation Fuel

Use at scale in line with

EU and UK mandates

> Long-term supply agreements

with fuel suppliers

Zero carbon emission aircraft

Committed to being an early

adopter in transitioning

the fleet

> Our partnerships include

Rolls-Royce, Airbus, Cranfield

Aerospace Solutions, GKN

Aerospace

MINIMISE OUR ENERGY

REQUIREMENTS

CHANGE FROM FOSSIL

FUELS TO LOW-CARBON

AND ZERO CARBON SOURCES

ADDRESS RESIDUAL

EMISSIONS TO REACH

NET ZERO

OUR NET ZERO ROADMAP (CONTINUED)

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

BUSINESS MODEL

Making low-cost

travel easy

CREATING VALUE THROUGH

Standard low-cost model easyJet differentiation

CUSTOMER

> Standardised

products to

meet the needs

of individuals.

> Leading customer app which

improves the overall experience

from booking to check-in to

reaching the aircraft, often without

the need for human interaction.

> Warm welcome and personal

service to get customers to their

destination on time.

> Disruption management

self-service tool makes it easier

for customers to be better

supported, informed and able to

make changes when disruption

does occur.

Standard low-cost model easyJet differentiation

CAPITAL EFFICIENCY

> Single fleet type

with standard

specification.

> High density,

single-class cabin.

> Short turnarounds

and high aircraft

utilisation.

> Young fleet.

> Opportunity to increase the

average gauge of our aircraft

through our fleet renewal

programme, bringing in larger

aircraft.

> This presents us with a

considerable opportunity for

organic growth by increasing our

overall seat capacity.

> c.35% of the A319s will be replaced

over the next three years.

Standard low-cost model easyJet differentiation

COST EFFICIENCY

> High productivity

and strong cost

culture.

> Long-term strategic partnerships

with key airports and ground-

handling operators.

> Focus on seasonal bases

which increases cost flexibility,

with 21 aircraft now operating

for eight months of the year from

these bases. New seasonal base

to open in Alicante in 2024.

Standard low-cost model easyJet differentiation

NETWORK AND SCHEDULE

> Point-to-point

routes.

> Frequency

of schedule.

> Leadership positions in primary

and slot-constrained airports in

many of Europe’s largest

catchments with high customer

demand.

> These have proven to be

among the highest yielding in

the market and enable us to

tap into both business and

leisure demand.

> Our network is unrivalled

and difficult to replicate.

Standard low-cost model easyJet differentiation

SCALE AND GROWTH

> Scale drives high

brand awareness

and facilitates

volume pricing deals

(e.g. airports, fleet).

> Spreads fixed

overheads over

larger volume

of seats.

> We have strengthened and will

continue to strengthen our

positions as the competitive

landscape evolves, bidding for

additional slots where it makes

economic sense.

> We have an opportunity for

further growth by investing

in new, larger aircraft with

greater seat numbers

(known as upgauging).

Standard low-cost model easyJet differentiation

PRODUCT PRICE AND DISTRIBUTION

> Low fares

predicated on

basic airport

and cabin product.

> Unbundled fares

with additional

charges for

bags, seats

and catering.

> Industry-leading revenue

management capability, including

dynamic pricing of ancillaries.

> Continued evolution of the

Group’s product portfolio to

build on spend per customer

and deliver enhanced

sustainable returns.

> Limited indirect distribution

to capture additional value.

PRODUCT PRICE

AND DISTRIBUTION

COST

EFFICIENCY

SCALE

AND GROWTH

CAPITAL

EFFICIENCY

CUSTOMERNETWORK

AND SCHEDULE

LOW-COST OPERATIONS

We deliver our purpose by leveraging the

low-cost airline business model with

network and service differentiation.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

2018 2019 2020 2021 2022 2023

100

120

140

MARKET REVIEW

key

market

driver

impact

on our

industry

how we are

responding

Demand

The airline industry overall is a cyclical one,

with demand for flights driven primarily by

economic growth. Demand is also seasonal,

particularly in leisure travel. However, the

business model of low-cost carriers such as

easyJet tends to be more resilient to recession,

as there will be some customers who seek

greater value during periods of low economic

growth, attracted by our lower prices and our

network of primary airports.

Demand in the first half of the year grew

strongly as the industry rebound from the

pandemic continued, with easyJet’s passenger

numbers being 41% higher than in the

equivalent six-month period in the previous

year. Over the second half of our financial year,

demand continued to be strong but external

factors – primarily air traffic control strikes in

Europe, notably France – caused disruption to

spike and eventually led to easyJet reducing

flight volumes at Gatwick from July, which

reduced passenger numbers compared to

what they would otherwise have been.

Later in the year Gatwick Airport also imposed

flight reductions across all airlines as they

struggled with staffing levels in their air traffic

control tower. Passenger numbers in the

second half of our financial year were 7% higher

than in the second half of the previous financial

year. Overall, easyJet flew 82.8 million

passengers in this financial year, an increase of

19% on the previous year and 86% of the

pre-pandemic passenger numbers.

Forecasts from a range of institutions are that

economic growth will be weak across both the

UK and the EU in 2024, as a consequence of

geopolitical factors such as the ongoing wars in

Ukraine and the Middle East, high inflation and

interest rates. However, whilst consumers’

disposable income is under pressure, a recent

survey showed that 77% of UK consumers are

willing to protect their spend on holidays and

travel above most other items of discretionary

expenditure. Furthermore, we believe that

easyJet will be protected due to the emphasis

on value in such an environment.

> Most European airlines have seen

customer numbers increase strongly this

year and they are now at similar levels to

those seen prior to the pandemic.

> The continued increases in the cost of living

and the associated squeeze on household and

business incomes across European economies

are likely to increase the emphasis on value in

the short term, to the natural advantage of

low-cost carriers such as easyJet.

> We have moved a significant percentage

of our fleet to destination bases, which

allows us to reallocate capacity from one

source market to another rapidly in

response to demand fluctuations.

> We focus on constrained airports, where

demand is more resilient to these

macro-economic pressures.

> The combination of low fares, primary

airports and our city network is an attractive

offering for business travellers when cost

focus is paramount.

> Our strategic focus on ‘Building Europe’s

best network’ and ‘Transforming revenue’

addresses these market dynamics, including

how we manage the associated risks.

fuel

Fuel is one of the biggest costs airlines face

and one of the most volatile. Fuel represented

26% of easyJet’s headline cost base in the

current financial year. The ICE Brent crude oil

spot price has fluctuated between $72 and

$99 per barrel over our financial year. The

price was predominantly on a downward

trend for the first seven months through to

May 2023, coming off the spike which the

Russian invasion of Ukraine triggered in 2022.

Then a combination of stronger world

demand and reduced OPEC production levels

led to a general increase in the market price

of oil over the remainder of our financial year,

with the price at $95 per barrel at

30 September 2023, 8% higher than

12 months earlier. The price of jet fuel is

strongly correlated with the price of crude oil.

Brent price

> Many European airlines hedge their

fuel costs, reducing their exposure to

short-term volatility in the price of jet fuel.

> Aerospace companies are developing new

technologies and fuels which could in the

future help to decarbonise aviation. This

could have an impact on the price of jet

fuel as well as the alternative fuels as

demand patterns shift over time.

> easyJet has continued its fuel hedging

programme throughout the year and is

76% hedged for H1 FY24.

> Further details on how we manage this risk

can be found under the Macro-economic

conditions risk on page 63.

> easyJet is involved in a number of

initiatives to achieve our ambition to

be a leader in decarbonising aviation.

The main ones are hydrogen aircraft

partnerships and the use of Sustainable

Aviation Fuel. Full details can be found in

the ‘Pioneering future travel’ section on

pages 48 to 50.

The key factors and trends which influence easyJet and

all operators within the European airline industry.

MARKET DYNAMICS

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

MARKET REVIEW (CONTINUED)

key

market

driver

impact

on our

industry

how we are

responding

Environmental

and social

Sustainability, in particular the carbon emissions from flights

and their contribution to climate change, is a significant issue

for the aviation industry.

According to research by Kantar Public across six European

countries in September 2021, 78% of European consumers

consider climate change a very serious problem. In 2022, a

nationwide study of 2,000 British holidaymakers, conducted

by easyJet, revealed that 76% think that companies need to

urgently set out how they will achieve net zero this century

and demonstrate how they are operating more sustainably.

78% say they will choose an airline based on their sustainability

credentials when travelling in the future and 70% would

commit to a zero carbon emission holiday if it was available

to them.

> Individual airlines, airports and industry groups have

set net zero targets for 2050.

> Aerospace companies are developing new technologies

and fuels which could in the future help to decarbonise

aviation.

> Governments across Europe are considering the

policy measures that will be needed to meet their

own net zero targets.

> For 2023 we are ahead of our SBTi-aligned net zero

roadmap (see page 20 for full details).

> We recently announced that we are the first airline to

sign a contract with Airbus relating to Direct Air Carbon

Capture and Storage technology. We believe carbon

removal will play an important role in addressing our

residual emissions in the future, to help us achieve our

pathway to net zero.

> Our full Sustainability Strategy with further detail can be

found in the Sustainability section on pages 39 to 58.

On-Time Performance,

airspace management and

supply chain pressures

European airspace remains a challenging and congested

environment. Eurocontrol continues to redesign the

airspace infrastructure with the aim of creating a more

efficient and sustainable network, but currently UK and EU

airspace consists of a complex network of flight paths that

have seen little development over the last 70 years.

In 2023, congested airspace from the continued conflict in

Ukraine, French air traffic control strikes, the impact of

NATS staff shortages in the control tower at Gatwick,

weather-related disruption and the NATS system failure in

August all drove operational challenges, particularly over

the second half of the year, resulting in a higher-than-

normal level of cancellations.

> Air traffic control delays cause a number of issues

from additional flying time and airport congestion

to inefficient flight planning.

> Antiquated flight paths cause additional fuel burn.

> The NATS system failure in August 2023 caused

many flight cancellations, resulting in the travel plans

of thousands of travellers across Europe being

disrupted and causing airlines to incur additional

welfare costs (hotels, food, etc.) on behalf of their

customers.

> We are encouraging Gatwick to build more resilience

into their operations, particularly staffing levels in the

control tower.

> Recruitment is already underway for cabin crew and

pilots for summer 2024, to ensure we are operationally

ready for next year’s peak trading period.

> We are advocating for change and modernisation of

airspace, alongside other airlines, by lobbying national

decision makers and maintaining a collaborative

relationship with Eurocontrol (see page 44 for further

details).

> Our strategic focus ‘Delivering ease and reliability’

addresses these market dynamics, including how we

manage the associated risks (read more on pages 16

and 17).

Foreign

exchange

easyJet is exposed to foreign exchange rate movements,

mainly resulting from euro revenues and US dollar costs,

translated into our functional currency of sterling. Sterling

strengthened during the year against both the euro and

US dollar, as the political turmoil which impacted the UK in

autumn 2022 faded and investors’ confidence in the UK and

sterling returned. Sterling’s strength against both currencies

peaked in July 2023 and then it weakened over the late

summer as expectations of the Bank of England continuing to

raise interest rates began to fade. When sterling weakens this

has an adverse impact on US-denominated costs (mainly fuel,

leases and maintenance) and a favourable impact on euro

revenues when translated into sterling.

> Many European airlines hedge their foreign currency

requirements, particularly for the US dollar, which

reduces their exposure to short-term currency

fluctuations.

> easyJet has continued its US dollar hedging programme

throughout the year and is already 76% hedged on US

dollars for H1 FY24.

> Further details on how we manage this risk can be

found under the Macro-economic conditions risk on

page 63.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

KEY PERFORMANCE INDICATORS

headline profit/(loss)

before tax per seat (£)

2023

(15.16)

(40.29)

(2.19)

4.91

4.07

2022

2021

20 20

2019

Why it is important

Incremental improvements in profitability ensure

that we have a platform for long-term growth

while generating value for all stakeholders.

What we measure

Headline profit/(loss) before tax divided by the

number of seats flown. Prior to this year, our per

seat metrics were calculated for the airline only.

However, given the growth of easyJet holidays we

will now focus on headline profit/(loss) before tax

per seat for the Group as a whole as that metric

will correctly reflect the performance of the airline

and the holidays business combined. We will

therefore use the Group metric as our KPI going

forwards, particularly as it is one of our new

medium-term targets (see page 10 for details).

How we performed

Headline profit before tax per seat for the Group

was £4.91 (2022: £2.19 loss). Airline revenue per

seat (RPS) increased by 19% at constant

currency, a consequence of increased loads and

strong yields. The increase in RPS was balanced

across passenger and ancillary revenue, and

included improved revenue from the revised

in-flight retail offer. This was tempered by cost

per seat (CPS) on fuel increasing 31% on a

constant currency basis predominantly due to

the increase in post-hedge fuel prices compared

to the prior financial year. CPS on airline headline

costs excluding fuel only rose by 1% at constant

currency, as strong cost management and

increased flying (which reduces fixed costs per

seat) offset the inflationary headwinds the

sector overall has been exposed to. Holidays

contributed £1.32 to the Group’s headline profit

before tax per seat, up from £0.46 in 2022, as a

consequence of its increased profitability driven

by its growth in customer numbers.

2023

(14.68)

(39.87)

(2.65)

3.59

4.07

2022

2021

20 20

2019

headline ebitdar margin (%)

2023

(9.0)

(37.8)

9.9

13.8

15.2

2022

2021

20 20

2019

Why it is important

EBITDAR is a good proxy for cash generation.

EBITDAR margin is a metric the business uses to

make its operating decisions and is one measure

of the underlying performance of the business.

What we measure

Headline EBITDAR divided by total revenue.

How we performed

Headline EBITDAR margin % increased from 9.9%

last year to 13.8% this year. This was a reflection

of the improved performance of the Group as

volumes and prices increased and customers’

confidence to travel returned.

headline EARNINGS/(LOSS)

per share (p)

2023

(149.7)

(166.9)

(19.6)

45.4

88.7

2022

2021

20 20

2019

Why it is important

Delivering sustainable shareholder value is a

fundamental part of our mindset as we manage

our business.

What we measure

Headline profit/(loss) after tax divided by the

weighted average number of shares in issue during

the year (adjusted for shares held in employee

benefits trusts).

How we performed

Headline earnings per share was 45.4 pence

(2022: 19.6 pence loss per share) as a result of

the improved performance of the Group this

year. Total earnings per share was 43.1 pence

(2022: 22.4 pence per share loss).

1) 2020 previously restated due to impact of 2021 rights issue.

45.4p

13.8%

Group

£4.91

AIRLINE

£3.59

Group

Airline

easyJet has seven key performance indicators

which we use to measure our overall progress.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

KEY PERFORMANCE INDICATORS (CONTINUED)

headline return/(Loss)

on capital employed (%)

2023

(19.2)

(25.2)

0.1

12.6

11.9

2022

2021

20 20

2019

Why it is important

As a low-cost business, we focus on efficiency to

provide outstanding customer service at the best

value, while also driving operational efficiencies

which will maximise our return on investment.

What we measure

Headline profit/(loss) before interest, foreign

exchange gain/(loss) and tax, applying tax at the

prevailing UK corporation tax rate at the end of the

financial year, and dividing by the average capital

employed. Capital employed we now define as

shareholders’ equity, excluding the hedging and

cost of hedging reserves, plus net debt.

How we performed

Headline ROCE improved to 12.6% (2022: 0.1%)

driven by the higher headline profit before

interest, foreign exchange gain/(loss) and tax of

£476 million this year (2022: £3 million),

combined with the reduction in net debt. Total

ROCE for the year was 12.0% (2022: (0.7)%).

The total ROCE was adverse to the headline

ROCE due to non-headline items generating a

£23 million charge before tax in the income

statement.

customer satisfaction (%)

2023

2022

2021

20 20

2019

Why it is important

Customers have increasing choice and their

expectations are rising. Ensuring we meet their

evolving needs will position us as the brand of

choice when flying within Europe.

What we measure

Our customer satisfaction index is based on the

results of a customer satisfaction survey for the

airline, measuring how satisfied the customer was

with their most recent flight.

How we performed

Overall customer satisfaction stayed constant at

73%. Customer satisfaction is closely related to

the level of disruption experienced, notably

on-the-day cancellations and delays. Generally,

when disruption increases, our customer

satisfaction score decreases. The operational

challenges experienced in the year, and

particularly over the busy summer trading period,

resulted in a high level of cancellations and delays

and therefore our customer satisfaction score was

lower than we would like it to be.

on-time performance (%)

2023

2022

2021

20 20

2019

Why it is important

Reliable operational performance is a key factor in

our customers’ perceptions of their experience with

us. Managing on-time performance (OTP) and

minimising disruption will positively impact on the

likelihood of our customers choosing to fly with us

on a repeat basis.

What we measure

Percentage of flights which arrive within 15 minutes

of the scheduled arrival time.

How we performed

Our OTP declined in the year to 66% (2022: 72%)

primarily as a consequence of the external

factors such as air traffic control delays which

caused disruption.

emissions per

passenger kilometre (g)

2023

70.77

81.08

70.36

67.23

70.41

2022

2021

20 20

2019

Why it is important

An important part of our strategy is to make a

meaningful difference for our planet and help to

tackle climate change. In the short term our

focus is on being as efficient as we can and

driving carbon efficiencies.

What we measure

How much carbon dioxide is produced for each

passenger, for each kilometre they fly with us.

How we performed

In 2023, our carbon emissions per passenger

kilometre were 67.23g, a significant reduction

from 70.36g in 2022 and our lowest emissions

figure ever. This is a reflection of the increased

load factor in the current year which drove a

decrease in emissions per passenger, combined

with the increased number of more efficient NEO

aircraft and a continued focus on flight efficiency

measures such as Descent Profile Optimisation.

67. 2g

66%

73%

12.6%

Group

Capital employed definition changed to now exclude the

hedging and cost of hedging reserves. 2019–2022

recalculated as a result.

1) In 2023 we changed our customer satisfaction measurement

platfom and 2022 has been restated for comparison.

Airline

airline

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW

OUR FINANCIAL

RESULTS

KENTON JARVIS

Chief Financial Officer

Headline profit before tax of £455 million for

the year ended 30 September 2023 was an

improvement of £633 million on the loss of £178

million for the year ended 30 September 2022, with

total revenue of £8,171 million, £2,402 million ahead

of the prior year. The year was characterised by a

strong trading environment, culminating in a record

summer for the Group. This result was supported

by an excellent contribution from easyJet holidays,

which has started to demonstrate its potential for

the future.

easyJet flew 82.8 million passengers in the year

(2022: 69.7 million), up 19% on the previous year,

this being the first year with no travel restrictions

since 2019. Strong yields and airline revenue per

seat (RPS) recovery (15% and 21% increase

respectively over the prior year) were key drivers

of success in the year. Load factor for the year was

89.3% (2022: 85.5%), an improvement of 3.8

percentage points, and capacity was 14% ahead of

the prior year. easyJet holidays delivered package

holidays for 1.9 million customers (including agent

commission passengers, 2022: 1.1 million),

generating incremental revenue of £776 million

(2022: £368 million) and delivering £122 million of

headline profit before tax (2022: £38 million). The

year was also characterised by industry-wide cost

challenges coming off the back of persistently

high levels of inflation. Despite the resilience

measures that easyJet undertook, we also saw

significant disruption including the impact of ATC

failures and external industrial action in several of

our markets.

Trading in the first half of the financial year, with

the absence of the prior year pandemic-related

travel restrictions, saw capacity increase by 25%

to 37.9 million seats flown (H1 2022: 30.3 million)

and strong yields delivering a record first half RPS

result of £66.46 (H1 2022: £47.61). The total

number of passengers carried in H1 increased by

41% to 33.1 million (H1 2022: 23.4 million) with load

factors at 87.5%, a 10.2 percentage point increase

on the comparative period (H1 2022: 77.3%).

Disruption due to external industrial action has

been a feature throughout the year, starting in the

first half of the financial year with French ATC

strikes resulting in flight cancellations and an

impact on on-time performance. In March alone,

only five days were unaffected by strike action.

Second half trading saw a continuation of strong

yields and RPS results, and a Q4 load factor of

91.6%. July and August revenues of over £1 billion

in each month were a record, as was headline EBIT

in Q4, the strongest quarterly headline EBIT in

easyJet’s history. This was despite significant

disruption over the summer period, with ongoing

industrial action and significant ATC challenges

across Europe, in particular at Gatwick Airport.

easyJet took action to thin the flying schedule at

Gatwick over the peak trading period in order to

mitigate ATC issues and ensure flights flew to

schedule, protecting the customer experience by

limiting on-the-day cancellations.

Fuel prices remained high throughout the year

and experienced significant volatility, ranging from

c.$700 to $1,100 per metric tonne. The industry

faced significant inflationary cost pressures in

addition to the cost of the disruption in the year.

Notwithstanding, with a focus on cost

management, productivity, and increased capacity,

the airline cost per seat (CPS) excluding fuel for the

year of £54.30, was an increase of only 2% on the

prior year (2022: £53.20). With the increase in

average sector length factored in, airline headline

cost per available seat kilometre (CASK) excluding

fuel at 4.44 pence was marginally lower than the

prior year (2022: 4.45 pence).

The strong revenues and cost management

delivered a headline EBITDAR achievement for the

year of £1,130 million, £561 million greater than the

prior year (2022: £569 million), and a statutory

profit before tax for the year of £432 million, an

improvement from the loss of £208 million in the

previous year.

The year was characterised by

a strong trading environment,

culminating in a record summer

for the Group, supported by

an excellent contribution from

easyJet holidays.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

£ per seat – Airline only

2023 2022

Airline revenue 79.84 66.23

Headline costs excluding fuel, balance sheet FX and ownership costs

(46.93) (44.09)

Fuel (21.95) (15.68)

Headline EBITDAR 10.96 6.46

Depreciation, amortisation and dry leasing costs (7.02) (6.89)

Headline EBIT 3.94 (0.43)

Net finance charges (0.63) (1.45)

Foreign exchange gain/(loss) 0.28 (0.77)

Airline headline profit/(loss) before tax 3.59 (2.65)

Headline tax (charge)/credit (1.22) 0.38

Airline headline profit/(loss) after tax 2.37 (2.27)

Non-headline items (0.24) (0.36)

Non-headline tax credit 0.06 0.10

Airline total profit/(loss) after tax 2.19 (2.53)

1) Ownership costs are defined as depreciation, amortisation and dry leasing costs, plus net finance charges.

2) These per seat metrics are for the airline business only, as the inclusion of hotel-related revenue and costs from the

holidays business will distort the RPS and CPS metrics as they are not directly correlated to the seats flown by the airline.

Our easyJet holidays business forms a separate operating segment to the airline, and easyJet holidays’ key metrics are

included under key statistics.

Total revenue increased by 42% to £8,171 million (2022: £5,769 million) and by 40% at constant currency.

Airline RPS increased by 21% to £79.84 (2022: £66.23) and increased by 19% at constant currency,

reflecting both increased load and strong ticket yield. The increase in airline RPS was balanced across

passenger and ancillary revenue, and included revenue from the revised in-flight retail offer. As noted

above, the airline performance was complemented by strong holidays performance with net revenue

(i.e. excluding flight revenue which is reported under airline revenue) of £776 million.

Total headline costs excluding fuel, balance sheet exchange movements and ownership costs increased by 28%

to £5,008 million (2022: £3,921 million) mainly as a result of the volume of flying and general industry cost

pressures. Costs were also impacted by the disruption seen throughout the year with increased costs to deliver

operational resilience and £211 million EU261 compensation and welfare costs incurred for airline passengers

(2022: £205 million). However, the airline CPS of £46.93, was only 6% higher than the prior year (2022: £44.09),

4% at constant currency, and accommodates an increase in average sector length of 3% versus FY22. The CPS

benefited from fixed operating costs spread across greater flying capacity in addition to easyJet’s continued

focus on operational cost reduction with a number of cost reduction projects delivered in the year. The projects

included the retrofitting of descent profile optimisation software across the fleet, reducing fuel burn, and the

launch of enhancements to our customer self-service disruption management tool, which has provided cost

and customer experience benefits with regards to the management of disruption within the year.

Where amounts are presented at constant currency these values are an alternative performance measure

(APM) and are not determined in accordance with International Financial Reporting Standards (IFRS), but

provide relevant and comparative reporting for readers of these financial statements. Definitions of

APMs and reconciliations to IFRS measures are set out in the Glossary on pages 195 and 196.

PERFORMANCE SUMMARY

£ million (reported) – Group 2023 2022

Total revenue 8,171 5,769

Headline costs excluding fuel, balance sheet FX and ownership costs

(5,008) (3,921)

Fuel (2,033) (1,279)

Headline EBITDAR 1,130 569

Depreciation, amortisation and dry leasing costs (654) (566)

Headline EBIT 476 3

Net finance charges (48) (117)

Foreign exchange gain/(loss) 27 (64)

Headline profit/(loss) before tax 455 (178)

Being:

Airline headline profit/(loss) before tax 333 (216)

Holidays headline profit before tax 122 38

Headline tax (charge)/credit (114) 31

Headline profit/(loss) after tax 341 (147)

Non-headline items (23) (30)

Non-headline tax credit 6 8

Total profit/(loss) after tax 324 (169)

£ million (reported) – Group 2023 2022

Headline profit/(loss) before tax per seat 4.91 (2.19)

The total number of passengers carried in the financial year increased by 19% to 82.8 million (2022: 69.7

million), driven by a 14% increase in seats flown to 92.6 million seats (2022: 81.5 million seats) and a 3.8

percentage point increase in load factor to 89.3% (2022: 85.5%). This reflects the increased capacity

from a year with no travel restrictions, an expanded network offer, and the increased customer demand.

Capacity was impacted by disruption in the year, with specific measures such as pre-emptive thinning to

provide schedule resilience, and the capacity caps introduced at Gatwick in the fourth quarter as the

airport struggled with a shortage of staffing in the control tower operated by NATS.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

Total fuel costs increased by 59% to £2,033 million for the year (2022: £1,279 million), which on an airline

CPS basis represented a 40% increase to £21.95 (2022: £15.68), 31% at constant currency. The price of jet

fuel remains high due to the increase in global demand with the resumption of pre-pandemic levels of

flying and increased economic activity, along with the restricted supply from OPEC+ due to production

cuts. The CPS metric also reflects the increase in average sector length compared to the prior year, with

an increase of leisure routes in the destination mix.

Similar to the prior financial year, the movement in exchange rates in the year, and the translation of

foreign currency denominated revenue and costs including fuel, has had a notable impact on the

consolidated income statement. This has resulted in a net debit impact of £115 million (2022: £88 million)

across costs and revenue, and an income statement credit of £27 million (2022: £64 million charge) from

the translation of foreign currency denominated monetary assets and liabilities on the statement of

financial position. Ownership costs benefited from the movement in US dollar interest rates with a credit

of £30 million (2022: £71 million) from the discounted maintenance reserves provision, which uses

long-term US dollar interest rates to set the discount rate.

During the financial year, the drawn element of the UKEF facility and the February 2016 €500 million

Eurobond were repaid, considerably reducing easyJet’s gross debt. This benefited net interest costs in

the second half of the financial year, whilst there was also a positive impact from higher interest rates on

cash balances throughout the whole year, resulting in the net finance charge for the year of £48 million

being 59% lower than the prior year (2022: £117 million).

easyJet holidays continued to perform strongly, with a significant growth in customer numbers and its

low fixed-cost operating model. Overall, incremental revenue from easyJet holidays of £776 million was

more than double (111%) the previous year’s revenue contribution (2022: £368 million), with 1.9 million

customers (including agent commission passengers, 2022: 1.1 million) delivering £122 million of headline

profit before tax (2022: £38 million).

The headline profit before tax per seat for the Group was £4.91 (2022: £2.19 loss). The airline’s headline

profit before tax per seat improved from a loss of £2.65 in the prior year to a profit of £3.59 this year,

driven by the improvement in RPS as described earlier. This was tempered by the headline CPS

increasing by 11%, primarily due to the increase in fuel costs on a per seat basis increasing 31% at

constant currency. However, airline headline CPS excluding fuel only rose by 2% at constant currency, as

strong cost management and increased flying (which reduces fixed costs per seat) offset the inflationary

headwinds the sector overall has been exposed to. Holidays contributed £1.32 to the Group’s headline

profit before tax per seat, up from £0.46 in FY22, as a consequence of its increased profitability driven

by its growth in customer numbers.

A non-headline charge of £23 million (2022: £30 million) was recognised in the year consisting of a £19 million

correction on an historical foreign currency translation error of right of use asset depreciation, a £nil million

loss on the sale and leaseback of eight aircraft (2022: £21 million loss from ten aircraft), a £3 million loss

(2022: £10 million) on the final disposal of landing rights surrendered as a consequence of the reduction in

our operations at Berlin Airport, and a net £1 million of restructuring charges (2022: £nil million) reflecting the

change in estimation of the final settlement of restructuring programmes initiated in prior years.

Corporate tax has been recognised at an effective rate of 25.1% (2022: 18.7%), resulting in an overall

tax charge of £108 million (2022: £39 million credit). This splits into a tax credit of £6 million on the

non-headline losses and a tax charge of £114 million on headline items.

PROFIT/(LOSS) PER SHARE

2023

Pence per

2022

Pence per

Change in

pence per

Basic headline profit/(loss) per share 45.4 (19.6) 65.0

Basic total profit/(loss) per share 43.1 (22.4) 65.5

Basic headline profit per share increased by 65.0 pence and basic total profit per share increased by

65.5 pence over the loss per share in the prior financial year as a consequence of the profit generated

in the current financial year.

RETURN ON CAPITAL EMPLOYED (ROCE)

Reported £ million 2023 2022

Headline profit before interest, foreign exchange gain/(loss) and tax 476 3

UK corporation tax rate 25% 19%

Normalised headline operating profit after tax (NOPAT) 357 2

Average shareholders’ equity (excluding the hedging and cost of

hedging reserves) 2,517 2,421

Average net debt 315 790

Average capital employed 2,832 3,211

Headline return on capital employed 12.6% 0.1%

Total return on capital employed 12.0% (0.7%)

1) The average capital employed and ROCE percentage has been restated to exclude the hedging and cost of hedging

reserves.

ROCE is calculated by taking headline profit before interest, foreign exchange gain/(loss) and tax,

applying tax at the prevailing UK corporation tax rate at the end of the financial year, and dividing by

average capital employed. Capital employed is defined as shareholders’ equity excluding hedging and

cost of hedging reserves plus net debt.

Headline ROCE for the year of 12.6% is significantly ahead of the prior year (2022: 0.1%). This reflects the

move into a strong headline profit position in the year combined with the reduction in net debt from the

profits generated and the positive working capital movement in the year driven by the increase in

unearned revenue. Total ROCE of 12.0% (2022: (0.7%)) is reduced by the non-headline charge in the year,

and is greater than prior year where the FY22 non-headline charge resulted in an operating loss.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

Summary net cash/(debt) reconciliation

The below table presents cash flows on a net cash basis. This presentation is different to the

presentation of the statement of cash flows in the consolidated financial statements as it includes

non-cash movements on debt facilities.

2023

£ million

2022

£ million

Change

£ million

Operating profit/(loss) 453 (27) 480

Net tax paid (12) (4) (8)

Net working capital movement excluding unearned revenue (19) 101 (120)

Unearned revenue movement 458 197 261

Depreciation and amortisation 673 564 109

Net capital expenditure (754) (530) (224)

Net proceeds from sale and leaseback of aircraft 76 87 (11)

Increase in lease liability (208) (43) (165)

Net funding activities – 53 (53)

Purchase of own shares for employee share schemes (15) (9) (6)

Other (including the effect of exchange rate movements) 59 (149) 208

Net decrease in net debt 711 240 471

Net debt at the beginning of the year (670) (910) 240

Net cash/(debt) at the end of the year 41 (670) 711

Net cash as at 30 September 2023 was £41 million (30 September 2022: £670 million net debt) and

comprised cash, cash equivalents and money market deposits of £2,925 million (30 September 2022:

£3,640 million), borrowings of £1,895 million (30 September 2022: £3,197 million) and lease liabilities of

£989 million (30 September 2022: £1,113 million).

Net working capital outflow, excluding unearned revenue, of £19 million in the year (2022: £101 million

inflow) predominantly reflects the increased holding of Emissions Trading System (ETS) allowances for

the remaining FY23 flying liability and FY24 forward purchase of allowances.

The unearned revenue movement of £458 million (2022: £197 million) has increased as customer booking

behaviour has normalised in the year, and easyJet has increased available capacity and stimulated

improved levels of demand, including for the easyJet holidays offer. In addition, the inflow reflects the

improved ticket and ancillary yields achieved.

The increase in depreciation and amortisation to £673 million (2022: £564 million) predominantly reflects

the increase in leased aircraft maintenance costs, recognised through depreciation, with the rise in flying

volumes and greater numbers of leased aircraft. Additionally, the prior financial year benefited from a

significant movement in the discount rate on maintenance reserves (based predominantly on US dollar

short-term and long-term rates) which reduced the overall maintenance charge, whereas the change in

the rate this financial year has been less pronounced.

Net capital expenditure in the year of £754 million (2022: £530 million) reflects the investment in fleet

renewal and growth in the overall size of the fleet. The expenditure is across ten new aircraft (2022:

eight), pre-delivery payments for future aircraft, capital expenditure on long life parts, engines and

aircraft spares, and maintenance additions. The sale and leaseback of eight aircraft in the year resulted

in a net cash inflow of £76 million compared to the ten sale and leasebacks in FY22 which generated

proceeds of £87 million. Lease additions (including the eight sale and leaseback aircraft) and lease

extensions are the key drivers for the increase in the lease liability by £208 million (which excludes

exchange rate impact and lease payments).

In the prior year, the net funding activities of £53 million relate to final funding income from the rights

issue in FY21.

The £208 million movement in ‘Other’ predominantly reflects a movement in net interest, as interest

received in this financial year is significantly higher due to increased interest rates, and the foreign

exchange impact in the year.

EXCHANGE RATES

The proportion of revenue and headline costs denominated in currencies other than sterling is outlined

below alongside the exchange rates in the year:

Revenue Headline costs

2023 2022 2023 2022

Sterling 55% 51% 32% 32%

Euro 35% 38% 35% 37%

US dollar 1%

1% 27% 25%

Other (principally Swiss franc) 9% 10% 6% 6%

Average headline exchange rates

2023 2022

Euro – revenue €1.15 €1.18

Euro – costs €1.15 €1.18

US dollar $1.24 $1.32

Swiss franc CHF 1.14 CHF 1.25

Closing exchange rates 2023 2022

Euro €1.15 €1.14

US dollar $1.22 $1.11

Swiss franc CHF 1.12 CHF 1.09

1) 2022 figures have been restated to exclude the impact of non-headline costs.

2) Our customers have the option of paying for flights in US dollars.

3) Exchange rates quoted are post-hedging applied to revenue and headline costs.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

Headline exchange rate impact

Favourable/(adverse)

Euro

£ million

Swiss franc

£ million

US dollar

£ million

Other

£ million

Total

£ million

Tota l revenue 66 46 1 1 114

Fuel (4) – (125) – (129)

Headline costs excluding fuel (63) (24) (17) 4 (100)

Headline total before tax

(1) 22 (141) 5 (115)

1) Excludes the impact of balance sheet revaluations.

The Group’s Foreign Currency Risk Management Policy aims to reduce the impact of fluctuations in exchange

rates on future cash flows. Refer to note 26 in the financial statements for more details.

easyJet recognises a significant element of revenue, 35%, across its network in euros, and therefore a

weaker sterling versus euro on average, when compared to the prior year, has resulted in a stronger

sterling denominated revenue (and similarly with Swiss francs). However, this has been offset by

increased costs due to the stronger euro compared to the prior year. Additionally, easyJet’s cost base is

27% US dollar denominated, notably fuel and aircraft lease payments, and therefore the post-hedge US

dollar rate strengthening compared to the prior year has also increased headline costs. On a net position,

the movement in average exchange rates between the current and prior years has resulted in an adverse

foreign currency impact of £115 million on the consolidated income statement.

Conversely, in-year movements in closing exchange rates resulted in easyJet benefitting from the

translation of foreign currency denominated monetary assets and liabilities held on the statement of

financial position, primarily due to sterling strengthening against the US dollar over the course of the

year, resulting in a net gain of £27 million (2022: £64 million loss).

FINANCIAL PERFORMANCE

Revenue

£ million – Group 2023 2022

Passenger revenue 5,221 3,816

Ancillary revenue 2,174 1,585

Holidays incremental revenue

1, 2

776 368

Total revenue 8,171 5,769

1) easyJet holidays numbers include elimination of intercompany airline transactions.

2) The presentation of Group revenue has been amended to split out easyJet holidays incremental revenue; refer to note 1a

in the financial statements.

Total revenue increased by 42% to £8,171 million (2022: £5,769 million) and 40% at constant currency.

The increase in revenue was a combined result of increased customer volumes, a focus on yield

optimisation resulting in strong ticket yield, and continued growth in our ancillary offer. The total number

of passengers carried increased by 19% to 82.8 million (2022: 69.7 million), arising from a combination of

a 14% increase in seats flown to 92.6 million seats (2022: 81.5 million seats) and a 3.8 percentage point

increase in load factor to 89.3% (2022: 85.5%). This reflects the increased capacity on offer with the

return to flying in the absence of pandemic-related travel restrictions. Similar to the prior year, within

revenue there was a £47 million credit (2022: £22 million) arising from the release of aged contract

liabilities within other payables, with £40 million recognised in passenger revenue and £7 million in

ancillary revenue.

Total airline RPS of £79.84 was 21% ahead of prior year (2022: £66.23), 19% at constant currency, and

total yield of £89.36 was 15% favourable (2022: £77.48), 14% at constant currency, with passenger yield

13% and ancillary yield 14% favourable at constant currency.

Airline ancillary revenue of £2,174 million was 37% ahead of the previous financial year (2022: £1,585

million), 35% at constant currency, as a result of both passenger numbers and improved yields. Refreshed

ancillary offers and pricing initiatives have contributed to the continued growth of this revenue stream as

an increasing proportion of our customers choose to buy our flexible product offering. Within ancillary

revenue the relaunch of the in-flight retail offer has delivered an additional £22 million of partner revenue

compared to the prior financial year with improved spend per seat alongside higher passenger numbers.

easyJet holidays’ incremental revenue increased by 111% to £776 million (2022: £368 million) and now

accounts for 9% of total revenue. The growth is attributable to improved yields and growth in customer

numbers to 1.9 million (including agent commission passengers, 2022: 1.1 million).

Headline costs excluding fuel

2023 2022

Group

£ million

Airline

£ per seat

Group

£ million

Airline

£ per seat

Operating costs and income

Airports and ground handling 1,800 19.44 1,443 1 7.70

Crew 941 10.16 767 9.40

Navigation 422 4.56 339 4.16

Maintenance 341 3.69 301 3.69

Holidays direct operating costs 582 n/a 273 n/a

Selling and marketing 232 2.04 173 1.88

Other costs 695 7.09 635 7.3 8

Other income (5) (0.05) (10) (0.12)

5,008 46.93 3,921 44.09

Ownership costs

Aircraft dry leasing – – 2 0.04

Depreciation 625 6.75 539 6.60

Amortisation 29 0.27 25 0.25

Net interest and other financing income and charges 48 0.63 117 1.45

702 7.65 683 8.34

Foreign exchange (gain)/loss (27) (0.28) 64 0.77

675 7.37 747 9.11

Headline costs excluding fuel 5,683 54.30 4,668 53.20

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

Headline CPS excluding fuel for the airline

increased by 2% to £54.30 (2022: £53.20), and

by 2% at constant currency.

Included within the Group headline costs excluding

fuel of £5,683 million is £654 million (2022: £330

million) related to the Holidays business, the cost

increase primarily being activity related due to the

growth of the business.

Headline operating costs and income

Airports and ground handling operating costs

increased by 25% to £1,800 million (2022: £1,443

million), an increase of 10% to £19.44 (2022: £17.70)

on an airline CPS basis, 7% at constant currency.

The year has seen a significant overall increase in

airport rates, both contractual and regulatory,

reflecting that easyJet largely flies from slot-

constrained and regulated airports. In addition,

with airport and ground handling costs being

linked to volumes, operating costs associated with

improved load factors, as well as higher passenger

and security charges, drove a cost increase on a

per seat basis.

Crew costs increased by 23% to £941 million (2022:

£767 million), an increase of 8% to £10.16 (2022:

£9.40) on an airline CPS basis, 6% at constant

currency. This CPS increase reflects the current

highly inflationary CPI environment, increased

costs invested in resilience to mitigate disruption,

post-pandemic pay deals and an increase in sector

length. This has been offset by productivity gains

in the year and the benefit of allocating the fixed

element of crew costs over greater capacity.

Navigation costs increased by 24% to £422 million

(2022: £339 million), a rise of 10% to £4.56 (2022:

£4.16) on an airline CPS basis, 7%at constant

currency, as a result of the increases in both

Eurocontrol rates and an increase in the sector

length of our commercial flying compared to the

previous year.

Maintenance costs increased by 13% to £341 million

(2022: £301 million), but remained flat at £3.69

(2022: £3.69) on an airline CPS basis, and

decreased by 4% at constant currency. This reflects

that whilst flying hours have increased in the year,

there is a benefit from the fixed element of

maintenance costs being apportioned over the

increased capacity.

Group selling and marketing costs increased by 34%

to £232 million (2022: £173 million), which for the

airline resulted in an increase of 9% to £2.04 (2022:

£1.88) on a CPS basis, 6% at constant currency. The

increase is predominantly in selling costs which result

from increased credit card bookings on increased

sales, higher credit card fees, and an element of

increased airport commission.

Group other costs increased by 9% to £695 million

(2022: £635 million), which for the airline was a

reduction of 4% to £7.09 (2022: £7.38) on a CPS basis,

and 4% reduction at constant currency. Other costs

include the impact of the disruption experienced in

the year, with net £211 million disruption compensation

and welfare costs incurred (2022: £205 million) after a

£24 million release (2022: £3 million pre-pandemic

liability release) of a liability held for prior year

disruption costs where customer compensation

claims have not matched our initial estimations. In the

prior year, easyJet also incurred significant wet lease

costs; the absence of such costs this year has been

offset by increased employee costs and benefits, and

an investment in cybersecurity and merchandising

technology in the year.

Headline ownership costs

Depreciation costs increased by 16% to £625

million (2022: £539 million), a 2% increase to £6.75

(2022: £6.60) on a CPS basis, and 2% at constant

currency. The increase in depreciation costs

compared to prior year is due to the increased

maintenance provision for leased aircraft,

reflecting higher flying volumes and the change in

the discount rate arising from movements in US

dollar interest rates, as well as an increase in the

leasehold fleet. The cost on a CPS basis has

benefited from the increased maintenance cost

being allocated across an increased seat capacity.

Group net interest and other financing income and

charges decreased by 59% to £48 million (2022:

£117 million), which amounted to a 57% decrease

on an airline CPS basis to £0.63 (2022: £1.45)

reflecting the benefit from higher interest rates on

cash deposits in the year, and the reduction in

gross debt.

Foreign exchange gains in the year were £27

million (2022: £64 million loss), being the benefit of

the retranslation of foreign currency denominated

monetary assets and liabilities arising from

currency movements, with sterling being stronger against both the US dollar and euro at 30 September

2023 compared to 30 September 2022.

Fuel

2023 2022

Group

£ million

Airline

£ per seat

Group

£ million

Airline

£ per seat

Fuel 2,033 21.95 1,279 15.68

Fuel costs for the year increased by 59% to £2,033 million, compared to £1,279 million in 2022, a 40%

increase on a CPS basis to £21.95 (2022: £15.68), 31% on a constant currency basis. The increase in flying

volumes, resulting in a 17% increase in block hours in the year, 3% increase in average sector length

(1,224km from 1,193km) and increased load factor, has contributed (on an absolute basis), in addition to

the increase in post-hedge fuel prices over the year.

The Group uses jet fuel derivatives to hedge against increases in jet fuel prices to mitigate cash and

income statement volatility. In order to manage the risk exposure, jet fuel derivative contracts are used in

line with the Board-approved policy to hedge up to 18 months of forecast exposures.

During the financial year, the average market price payable for jet fuel reduced by 16% from $1,063 per

tonne in 2022 to $897 per tonne in 2023. The overall post-hedge fuel price in the year was $867 per

tonne (2022: $705), the 23% increase compared to FY22 being due to the fuel cost at the time the FY23

hedges were entered into. Approximately 80% of jet fuel was hedged in 2023. Additionally, the cost of

compliance with emission trading schemes increased with a greater level of flying and the higher cost of

allowances coupled with the previous year comparative including the carry forward of unused ETS

allowances from the years impacted by pandemic-related restrictions.

Group profit/(loss) after tax

£ million (reported) – Group 2023 2022

Headline profit/(loss) before tax 455 (178)

Headline tax (charge)/credit (114) 31

Headline profit/(loss) after tax 341 (147)

Non-headline items before tax (23) (30)

Non-headline tax credit 6 8

Total profit/(loss) after tax 324 (169)

Non-headline items

A non-headline charge of £23 million (2022: £30 million) was recognised in the year. This consisted of a

£19 million correction on an historical foreign currency translation error of right of use asset depreciation,

£3 million loss on disposal for a further and final surrender of landing rights as a consequence of the

reduction in our operations at Berlin Airport (2022: £10 million loss) and net restructuring charges of

£1 million (2022: £nil million) resulting from the impact of additional costs arising from previously

announced restructuring programmes in Germany. The sale and leaseback of eight aircraft in the year

generated a £nil million loss (2022: £21 million loss from ten aircraft).

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

Corporate tax

Corporate tax has been recognised at an effective rate of 25.1% (2022: 18.7%), resulting in an overall tax

charge of £108 million (2022: £39 million credit). This splits into a tax charge of £114 million on the

headline profit and a tax credit of £6 million on the non-headline items, the right of use asset

depreciation non-headline charge being tax deductible and therefore creating a tax credit.

Summary consolidated statement of financial position

2023

£ million

2022

Re-presented

£ million

Change

£ million

Goodwill and other non-current intangible assets 641 582 59

Property, plant and equipment (excluding right of use assets) 3,936 3,682 254

Right of use assets 928 947 (19)

Derivative financial instruments 153 442 (289)

Equity investment 31 31 –

Other assets (excluding cash and money market deposits) 1,159 1,022 137

Unearned revenue (1,501) (1,043) (458)

Trade and other payables (1,764) (1,759) (5)

Other liabilities (excluding debt) (837) (701) (136)

Capital employed 2,746 3,203 (457)

Cash and money market deposits

2,925 3,640 (715)

Debt (excluding lease liabilities) (1,895) (3,197) 1,302

Lease liabilities (989) (1,113) 124

Net cash/(debt) 41 (670) 711

Net assets 2,787 2,533 254

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables.

2) Excludes restricted cash.

Since 30 September 2022 net assets have increased by £254 million.

The net book value of goodwill and other non-current intangible assets has increased in the year by £59

million, reflecting significant investment in the year on software development and applications, with a

focus on digital safety and security, optimising commercial platforms and customer applications, and

implementing aircraft descent optimisation software.

The property, plant and equipment (excluding right of use assets) net book value has increased by £254

million, the impact of the sale and leaseback of eight aircraft and the depreciation charge for the year

being offset by the ten new owned aircraft brought into the fleet in the year.

At 30 September 2023, right of use assets amounted to £928 million (2022: £947 million) and lease

liabilities amounted to £989 million (2022: £1,113 million). Whilst there have been a number of new leases,

including aircraft sale and leaseback transactions, and lease extensions, the relatively static position of

lease assets and liabilities arises from a number of lease returns, and the fact that new leases are being

entered into for shorter lease periods as easyJet manages the exit of A319 aircraft from the fleet.

There has been a £289 million decrease in the net asset value of derivative financial instruments, with

a closing net asset balance of £153 million (2022: £442 million). The movement is due to a decrease in

currency assets, including cross-currency swaps, as a result of the stronger pound against the US dollar

and euro in comparison to the rates at 30 September 2022. This reduction was partially offset by a gain

in the asset value of jet fuel hedges compared to 30 September 2022 as a result of an increase in the jet

fuel forward curve.

Other assets have increased by £137 million, mainly driven by increased current intangible assets

reflecting the ETS allowances held as a result of increased flying and the increased cost of the

allowances.

Unearned revenue increased by £458 million, reflecting customer behaviour returning to a more forward

booking position, improved yields, and FY24 capacity availability.

Other liabilities have increased by £136 million as a result of increased provisions, in particular for

maintenance with the increase in flying over the year, but also because deferred tax is now in a liability

position with the return to profit in the year.

Debt has decreased by £1,302 million as a result of the repayment of the drawn element of the UKEF

facility, and repayment of a €500 million Eurobond in the year, with no additional debt entered into.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

FINANCIAL REVIEW (CONTINUED)

KEY STATISTICS

Operating measures

2023 2022

Increase/

(decrease)

Seats flown (millions) 92.6 81.5 14%

Passengers (millions) 82.8 69.7 19%

Load factor 89.3% 85.5% 3.8ppt

Available seat kilometres (ASK) (millions) 113,334 97, 287 16%

Revenue passenger kilometres (RPK) (millions) 102,984 84,874 21%

Average sector length (kilometres) 1,224 1,193 3%

Sectors (thousands) 519 456 14%

Block hours (thousands) 1,094 938 17%

easyJet holidays passengers (thousands)

1,893 1,072 77%

Number of aircraft owned/leased at end of year 336 320 5%

Average number of aircraft owned/leased during year 328 321 2%

Average number of aircraft operated per day during year 276 255 8%

Number of routes operated at end of year 1,018 988 3%

Number of airports served at end of year 155 153 1%

1) holidays’ passenger numbers excluding agency commission passengers are 1.6 million (FY22: 0.8 million).

Refer to the Glossary on page 197 for further detail.

Financial measures

2023 2022

Favourable/

(adverse)

Total return on capital employed 12.0% (0.7%) 12.7ppt

Headline return on capital employed 12.6% 0.1% 12.5ppt

Group total profit/(loss) before tax per seat (£) 4.67 (2.55) 283%

Group headline profit/(loss) before tax per seat (£) 4.91 (2.19) 324%

Airline total profit/(loss) before tax per seat (£) 3.35 (3.01) 211%

Airline headline profit/(loss) before tax per seat (£) 3.59 (2.65) 235%

Airline headline profit/(loss) before tax per ASK (pence) 0.29 (0.22) 232%

easyJet holidays total profit before tax (£ millions) 122 38 221%

Revenue

Airline revenue per seat (£) 79.84 66.23 21%

Airline revenue per seat at constant currency (£) 78.60 66.23 19%

Airline revenue per ASK (pence) 6.52 5.54 18%

Airline revenue per ASK at constant currency (pence) 6.42 5.54 16%

Airline revenue per passenger (£) 89.36 7 7.48 15%

Airline revenue per passenger at constant currency (£) 87.98 7 7.4 8 14%

Costs

Per seat measures

Airline headline cost per seat (£) 76.25 68.88 (11%)

Airline headline cost per seat excluding fuel (£) 54.30 53.20 (2%)

Airline headline cost per seat excluding fuel at constant currency (£) 53.58 52.43 (2%)

Per ASK measures

Airline headline cost per ASK (pence) 6.23 5.77 (8%)

Airline headline cost per ASK excluding fuel (pence) 4.44 4.45 0%

Airline headline cost per ASK excluding fuel at constant currency (pence) 4.38 4.39 0%

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

PEOPLE AND CULTURE

CREATING

A WINNING

CULTURE

Living our Promises

to create a winning

culture

We need our colleagues to be highly

engaged and connected if we are to

reach our destination of being

Europe’s most loved airline.

By building an inclusive culture

and living our behaviours, we

create a place where everyone

can not only be themselves but

can thrive, grow to their full

potential and be at their best.

Jane Storm

Group People Director

This year we worked with our

people to create a behavioural

framework to support our promise

and deliver our strategy.

Through our biannual Your Voice Matters

engagement survey, we learn where to best

focus our time and energy to improve colleague

engagement, enhance and modernise our

colleague experience and how we can support

our people to deliver for our customers.

In a recruitment market that remains competitive,

we continue to improve how we attract and retain

diverse talent that reflects the communities we

serve. We have evolved our Employee Value

Proposition (EVP) and launched a more compelling

careers website to deliver a much-improved

candidate experience and to convert more of the

interest generated by our recruitment advertising

into applications.  

When people join easyJet, our proactive and

rewarding health and wellbeing strategy

empowers them to take small, easy steps

to better wellbeing every day. By giving colleagues

the tools, support and confidence they need to

take care of themselves and each other, they will

have the energy to enable us to perform at our

best and win together.

And by building an inclusive culture and living

our behaviours, we create a place where everyone

can not only be themselves but also thrive, grow

to their full potential and be at their best. This

will make it easy for us to reach our destination

together.

Our Promise behaviour framework

During the year, we ran focus groups with cabin

crew, pilots, engineers and colleagues from our

offices to pinpoint exactly what makes us great

today and share ideas on what we need to do

more of to help us reach our destination of being

Europe’s most loved airline.

We identified behaviours that will help guide

our daily decision making, strengthen our

culture and bring out the best in our teams.

Bringing our promise behaviours to life across our

business every day, including embedding them

into our employee life cycle, enables us to achieve

our purpose and deliver our strategic priorities:

> Building Europe’s best network

> Transforming revenue

> Delivering ease and reliability

> Driving our low-cost model

safe

> We work together to keep

everyone safe

> We speak up, learn from

our mistakes and act

when needed

> We respect and care for

each other and our own

wellbeing

challenging

> We proactively look for

ways to be more efficient

> We think about the impact

of our cost-based decisions

on others

> We seek opportunities to

drive growth

bold

> We’re ambitious, forward-

looking and make decisions

with confidence

> We’re curious and challenge

the way we do things to

improve and innovate

> We take accountability and

have a can-do attitude

welcoming

> We are passionate about

our customers and help

each other to deliver for

them every day

> We’re fair, open and

approachable

> We go above and beyond

to make things easy

Orange

> We love to win and

celebrate success

> We listen, learn and

break down barriers

> We’re brave, determined

and restless to try

new things

Strategic report

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PEOPLE AND CULTURE (CONTINUED)

underpinning

everything with an

inclusive culture

We are committed to building

an inclusive culture for all, where

colleagues can be their authentic

selves and feel a sense of belonging.

In 2023, we relaunched our Inclusion

and Diversity framework to keep us

focused on what is important for

creating the inclusive culture and

diverse and authentic workforce

that is key to our business success.

INCLUSION

INCLUSION FIRST

Engage

We have engaged with colleagues across the

business to ensure everyone understands the

part they play in creating an inclusive culture.

We embed important messaging into recurring

training for crew and put on a range of offsite

meetings and town hall events.

Educate

Throughout 2023, we have continued to work with

our partners at The Centre for Inclusive Leadership

(TCfIL) on creating an inclusive culture and

mindset. Together we have provided training

for the Airline Management Board and created

leadership communities across the easyJet

network. The partnership has enabled us to inspire

our leaders to think and engage differently and

create a culture that enables all colleagues

to belong and thrive.

Community

Our employee-led community known as the

Trailblazers network continues to support and

engage colleagues, putting on events and creating

educational tools that spread the word about the

value of the differences that make up our

colleague population.

This year we introduced ‘You matter moments’.

These are online information pages that inform all

colleagues about the events and observations that

make up our inclusion calendar, such as Holocaust

Memorial Day, Ramadan, LGBTQIA+ History month,

the Lunar New Year and International Women’s Day.

Our International Women’s Day event featured

women from the 2022 Women to Watch and Role

Models for Inclusion lists. Each participant spoke

about what embracing equity meant to them and

how everyone can play their part in making an

inclusive and equitable culture.

Other events included our continued engagement

in LGBTQIA+ Pride month, during which we took

part in six community Prides across the UK and

Europe. In August we recognised and celebrated

South Asian Heritage month, showcasing the rich

culture of the South Asian community within

easyJet and across Luton.

We continue to work with key partners to provide

insights and advice. Our current partnerships

include:

> Business Disability Forum (BDF)

> DIAL Global

> Diversity in Hospitality, Travel and Leisure

(WiHTL)

> Employers Network for Equality & Inclusion

(ENEI)

> Fantasy Wings

> Stonewall, the LGBTQIA+ charity

DIVERSITY

FLYING HIGH FOR PEOPLE

Attract

We continue to improve how we attract and retain

diverse talent that reflects the communities we

serve, with new ambitious targets to improve the

gender representation across our leadership

population and match our peers across the

industry and other FTSE companies.

As an organisation we are committed to the target

of 40% women on our plc Board, which we meet,

and the same percentage of the Airline Management

Board and its direct reports filled by women by 2025,

in line with the FTSE Women Leaders pledge. To

achieve this, we need female representation at all

levels of the organisation, to create a pipeline of

talent for the future.

Thrive

To ensure everyone can thrive and grow to their

full potential we invest in opportunities for our

under-represented communities. We introduced our

Accelerate Programme to support our ambitious

targets to improve female representation, which

has enabled 40 women to further develop and

support their career aspirations. Find out more

about this programme on page 37.

Retain

We continue to look at how we enhance and

modernise the experience of our colleagues

across easyJet, encompassing our communication

channels, policies and ways of working.

Strategic report

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PEOPLE AND CULTURE (CONTINUED)

accelerating women

CASE STUDY

The Accelerate Flightpath: Women’s Development

Programme is the first of a series of progressive

programmes aimed at addressing the imbalance

of representation in our under-represented

communities. It is designed to develop women

atall levels, with the wider goal of increasing the

number of women at a senior level.

The Inclusion and Diversity team worked with

theTalent Development team to develop

theprogramme and partnered with EDIT

Development to support and embed it. EDIT

works with organisations globally to create diverse

and inclusive cultures, bringing the latest thinking

to individual and organisational development.

The Accelerate programme encourages women

at easyJet to look back at what has influenced

who they are and explore the present for areas

ofgrowth and opportunity. It inspires them to

remove their ‘boundaries’ and discover the art

ofthe possible. EDIT and easyJet believe such

programmes create long-lasting communities who

can lift, support and challenge each other now

and in the future. To ensure that each participant

is successful, line managers are engaged from the

outset, so that they understand the fundamentals

of the programme and how they can play their

part in continually developing their direct report.

wellbeing

WE AIM TO BE RENOWNED FOR OUR

CULTURE OF CARE AND SUPPORT

We have developed a proactive health and

wellbeing strategy and a programme of

activities to drive impact and cultural change.

We started the year with a discovery phase.

The goal was to fully understand the health and

wellbeing landscape of easyJet, establish our

baseline and create clear KPIs to start making

informed decisions. We ran focus groups, released

a dedicated health and wellbeing survey, held

one-to-ones with the Airline Management Board

(AMB) and drew on the Your Voice Matters survey,

our Employee Assistance Programme and

occupational health data.

We used this information to design the strategy.

We started by defining our wellbeing proposition,

creating a wellbeing brand and building a robust

strategy framework, mapping out the initial areas

of focus, both in the short and long term.

The results were ‘Wellbeing, the easier way’, which

is about making the journey to better wellbeing as

easy as possible. The strategy has three elements

as shown on the right. Healthy living is about

giving our people the tools and resources they

need to prioritise all aspects of wellbeing. Healthy

communities bring colleagues together with a

shared purpose to create a sense of belonging.

Lastly, Healthy working is about building wellbeing

into all we do; from our policies and guidelines to

the way we work and interact.

wellbeing, the easier way

Empowering and supporting our

people to take small easy steps to

better wellbeing every day, so we

have the energy to perform at our best

and win together — at work and in life.

OUR WELLBEING PILLARS

What health and wellbeing

means to us at easyJet:

Healthy living

Looking after our mental and physical

wellbeing enables us to live well and

approach each day with positive energy

and confidence.

Healthy communities

Community and human connection are

essential to wellbeing as they foster a

shared sense of purpose, belonging

and support among our people.

Healthy working

Championing a shared responsibility

and commitment to wellbeing in the

way we work creates a high-performing

easyJet, powered by an energised,

thriving workforce.

The Accelerate course has given me the

opportunity to think about my key strengths,

identify my development areas, particularly in

how I come across to others, and the direction

I want my career to go in. Specific insights for

me have been looking at how to build on my

network and evaluate my career success

factors. It has been inspirational to share our

insights with one another on the course and

learn from each other’s experiences. I look

forward to the upcoming sessions and

continuing my journey towards my

career aspirations.

Lisa Matheson

Finance Manager, Crew and Accelerate participant

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Annual Report and Accounts 2023

4 (40%)

6 (60%)

10 (19%)

42 (81%)

3 (30%)

7 (70%)

7,538 (45%)

9,159 (55%)

19 (30%)

43 (70%)

resourcing

the best

EMPLOYER BRANDING

We evolved our EVP in January this year (see

image) to help us to continue to attract and retain

the best talent.

In addition, we have continued to evolve how we

advertise roles to ensure diversity remains a

priority, with targeted campaigns for cabin crew;

‘influencer’ recruitment marketing on TikTok as well

as working with our public relations team on a very

successful campaign showcasing older colleagues

who start careers with us over the age of 45.

Our new careers website launched in October

2023 at careers.easyJet.com. This provides

content and messaging aligned with the EVP, and

clearer information on why people should view

easyJet as an employer of choice.

PEOPLE RECRUITMENT 2023

Cabin crew

2,748

Engineering

186

Pilots

446

Management and

administration

582

EXTERNAL RECOGNITION

Over the last few years, we have featured in the

list of Britain’s Most Admired Companies. In 2022,

we were seventh in the Transport sector

easyJet holidays was named in the Sunday Times

Best Places to Work 2023. This accolade comes

following easyJet holidays being awarded ‘Best

Travel Retailer 2022’ at the Travolution Awards and

receiving the 2023  ‘Sustainable Future Award’ at

the Travel Weekly Globe Travel Awards.

On 30 September 2023 easyJet’s Glassdoor score

was 4.2.

PEOPLE AND CULTURE (CONTINUED)

Listening to

our colleagues

To reach our destination of being Europe’s most

loved airline, we understand that highly engaged

and connected colleagues are essential to our

success. We have a comprehensive employee

listening approach which includes employee

consulting groups, works councils, people action

groups and more.

The key mechanism for employee listening is our

Your Voice Matters employee engagement survey,

for which we partner with Peakon, a globally

recognised employee listening platform. We have

an aggregated colleague engagement score

7.2, with an aggregated participation rate of 64%.

1) The aggregated engagement score is derived from the

average responses to the four primary engagement

questions, as part of the four surveys conducted in FY23.

Creating capability

for the future

We continue to invest in building capability across our

organisation, building the skills we need for today and

tomorrow, and developing our leaders and managers.

We celebrated a very successful Learning at Work

week where over 1,000 of our colleagues participated

in various learning interventions centred around the

theme of creating the future.

We offer a variety of personal and professional

development programmes, with our flagship talent

development programme being Velocity. This year

we saw the first cohort graduate and a second

cohort start. Velocity was designed by easyJet for

easyJet and includes many structured workshops,

mentoring, coaching, 360 feedback, behavioural

assessment and a business challenge think tank,

enabling us to build our future leaders.

1) Figures per Human Capital Management system at

30 September 2023

2) The Airline Management Board is our ‘Executive Committee’

for the purposes of the FTSE Women Leaders Review.

3) Airline Management Board direct reports that are reported

as part of the FTSE Women Leaders Review.

4) Defined in accordance with the Companies Act 2006, and

includes those with responsibility for planning, directing or

controlling the activities of the Company as well as

Directors of our subsidiary undertakings.

Female Male

Airline

Management Board

Airline Management

Board direct reports

plc Board

Senior managers

All employees

The biggest single factor influencing our gender

pay gap is the gender representation within our

pilot community. This remains a well-known

industry-wide challenge that we continue to tackle,

working with our partners to inspire more young

people to consider a career in aviation, including

encouraging more women to become pilots.

Our gender pay gap submission for 2023 and

those for previous years are available on our

website at corporate.easyJet.com/sustainability/

gender-pay-reports

gender pay gap 2022

(reported in March 2023)

Female/Male

REPRESENTATION

Median gender pay gap

45.7%

Mean gender pay gap

50.3%

Make it easyJet

Everything we do is guided by our promise

and our goal to Make it easyJet

Connect people

to what they love

> High performing

people

> Great travel perks

> Flexible working

> Opportunities

Share our

Orange Spirit

> Energised

> Positive

> Inclusive

> United by purpose

Develop in

Orange years

> Making us Europe’s

most loved airline

> Drive to net zero

> A career with

breadth and variety

> Push you and your

ambitions further

Strategic report

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Annual Report and Accounts 2023

SUSTAINABILITY

OUR APPROACH TO

SUSTAINABILITY

easyJet not only aims to do

business responsibly, we want

to be pioneers of change.

Johan Lundgren

Chief Executive Officer

We’re conscious about the

impact of aviation and we’re

working hard to adapt our

operations to ensure we can

thrive within a low-carbon

economy, while safeguarding

the enormous benefits of

travel and tourism for

future generations.

Aviation contributes to climate

change so we’re working hard to

reduce the impact of our

operations.

That feeling of responsibility

extends to preserving the many

benefits of travel and tourism. It

connects people, countries and

cultures, and supports the

aspirations and livelihoods of

millions of people. If lost, it

would have a devastating global

impact on economic prosperity

and social mobility.

Clearly, we need to find a balance

that both lowers the impact of

aviation and safeguards these

benefits. This is why we

developed and published our

SBTi-aligned (and now award-

winning) net zero roadmap, are

collaborating in multiple cross-

sector partnerships and invested

multimillions of pounds in the

development of zero carbon

emission technology.

We’re also making significant

breakthroughs. Last year, we

partnered with Rolls-Royce to set

a world first by successfully

running a modern aero engine on

green hydrogen. A test on a key

component in a Pearl 700 engine

in September further proves

hydrogen’s suitability for aviation,

and – in addition to continued

partnerships with Airbus, GKN

Aerospace and Cranfield

Aerospace Solutions – easyJet

has played the lead role in

establishing the Hydrogen in

Aviation (HIA) alliance to help

ensure the infrastructure and

supply exists, so we can

capitalise on this opportunity

when it becomes available.

We’re also making substantial

operational efficiencies. A fifth of

our fleet comprises the highly

efficient NEO aircraft and we’ve

invested heavily in state-of-the-art

software and AI to drive flight

efficiencies – all of which are

contributing to easyJet’s best-ever

carbon intensity performance.

Looking beyond our operations,

we continue to support the vital

work of UNICEF and many

charitable and local community-

focused projects. At the same

time, easyJet holidays is working

to maximise the socio-economic

benefits of tourism to destination

communities, while managing

environmental impacts.

These are just a few examples,

but they demonstrate that

sustainability is at the heart of

our business strategy and a

recent Environmental, Social and

Governance (ESG) materiality

assessment shows how critical

it is not only to our financial

performance but to our

people too.

As ever, there is more work to be

done, but we are all dedicated

to building a sustainable and

thriving aviation sector that will

serve and benefit countless

generations to come.

Read more on pages 40 to 58

EXTERNAL RECOGNITION

ESG ratings 2023 awards

CDP uses an F-A scoring scale

Score

December 2022

MSCI uses a CCC-AAA

scoring scale

Score

July 2023

Score

25.4

Sustainalytics uses a 100-0

scoring scale, with a lower

score being better

easyJet was scored in

the top 10% of all

airlines ranked by

Sustainalytics

September 2023

Top Sustainable Airline at

Prague 2022

Prague Airport

Jan

2023

Sustainable Future Award

Travel Weekly Globe Travel

Awards

Awarded to easyJet holidays

Achievement in Sustainability

2023 — Airline

Business Travel News Awards

May

2023

Included in

Net Zero Strategy of the Year

UK Green Business Awards

Jun

2023

Travolution Impact Award

Travolution Awards

for easyJet’s net zero pathway

Airline Sustainability Award

Scottish Passenger

Association Awards

Nov

2022

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Annual Report and Accounts 2023

SUSTAINABILITY (CONTINUED)

sustainability and esg governance

Strong governance and monitoring at Board level drive delivery

of our Sustainability Strategy

PLC BOARD

Approves Sustainability Strategy and reviews implementation, guided by its committees below:

Nominations Committee

Diversity organisational targets,

employee engagement and culture, workforce

engagement, sustainability and ESG expertise

of the Board

Safety & Operational

Readiness Committee

Review and monitoring of the implementation

of easyJet’s annual safety plan

Audit Committee

Accuracy and reliability of non-financial

reporting, ethics and compliance-related impact,

climate risk, supply chain integrity and

sustainable procurement

Remuneration

Committee

ESG-linked remuneration and

gender pay gap

Finance Committee

Emissions Trading Schemes

Preparing for future reporting requirements

We are familiarising ourselves with International Sustainability Standards Board (ISSB) reporting

standards for when the UK adopts them, and with CSRD (EU Corporate Sustainability Reporting

Directive) in preparation for easyJet’s reporting under this legislation in future years.

United Nations Sustainable Development Goals relevant to our ambitions

sustainability strategy

Pioneering positive change for our planet, communities and people

Getting one step closer to net zero every day

Reducing our

impact today for

a better tomorrow

We work tirelessly to minimise

the environmental impact

across our operations.

> Focused on reducing the

carbon intensity of our flying.

Read more on page 53

SUSTAINABILITY STEERING COMMITTEE

Steers direction of Sustainability Strategy, including net zero roadmap and ESG disclosure

SUSTAINABILITY TEAM

Supported by specialist sustainability and ESG working groups

AIRLINE MANAGEMENT BOARD

Regular updates and approval

There are AMB sponsors for (key) material ESG topics

Strategic report

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Annual Report and Accounts 2023

MATERIALITY

SUSTAINABILITY (CONTINUED)

This year we have undertaken a

double materiality assessment

to identify the topics we need to

address right now and the issues

and opportunities of rising

importance. A double materiality

assessment looks outward at

the impact on people and the

planet, such as greenhouse gas

(GHG) emissions, the impact of

flights on destinations, and the

impact of easyJet on employee

wellbeing. It also looks inward, at

the impact on our business

success – such as the effect of

extreme weather events

exacerbated by climate change

on flight disruptions.

By engaging both internal and

external stakeholders, we gained

a deeper understanding of their

key ESG concerns. This will allow

us to make sure we are focusing

our efforts on what they care

most about. It will also help us

ensure our sustainability reporting

is aligned with our stakeholders’

concerns and help build brand

awareness. Importantly, it will help

us meet regulatory requirements,

particularly the EU Corporate

Sustainability Reporting Directive.

Understanding the main social and environmental

issues that have an impact on our business will help

us meet our ambition to pioneer positive change

in our sector.

Our double materiality process had five stages:

Carbon reduction is a big

opportunity as it’s an area

where we are driving

commercial viability. It makes

us more appealing to

sustainability-minded

customers. This is the single

biggest opportunity for us as

we are trying to lead the way

for all the right reasons.

Head office management

I admire easyJet’s decarbonisation

strategy and the decision to stop

offsetting to focus on reducing

emissions, by partnering

with Rolls-Royce on a hydrogen

engine. This can give them a

leadership role within the sector

for zero emissions flights. It’s a

way to gain prestige and authority

for public relations and attracting

customers, but also human

capital.

Supplier

the process

HORIZON SCAN AND ISSUE IDENTIFICATION

A review of the business, sustainability and regulatory

landscape gave us a list of 17 potentially relevant sustainability

topics that have an impact on our business, or where we have

an impact.

STAGE 2

STAKEHOLDER MAPPING

We worked with sustainability experts Corporate

Citizenship to plan the project, identify stakeholders

and understand the key topics of the agenda.

STAGE 1

STAKEHOLDER ENGAGEMENT

We gathered stakeholder perspectives through surveys,

interviews and focus groups. 841 stakeholders took part,

including academics, employees, customers, NGOs,

regulators, government departments and investors.

STAGE 3

ANALYSIS

Online surveys asked stakeholders to rate the importance of the topics

identified to business and society. Quantitative results from the surveys

were enriched with qualitative insights from interviews and focus

groups.

STAGE 4

VALIDATION

Topics were validated, reviewed and

confirmed by the Airline Management

Board.

STAGE 5

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SUSTAINABILITY (CONTINUED)

OUTCOMES

All 17 topics ranked highly on

the matrix – illustrating the high

relevance to easyJet of all the

ESG topics selected for

evaluation and reflecting the

complex range of impacts of

travel and tourism on easyJet’s

stakeholders, up and down the

value chain. There was a strong

consensus on material issues

across all stakeholder groups,

particularly between internal

and external stakeholders.

EMERGING TOPICS

AND OPPORTUNITIES

The process highlighted a

number of issues that will grow

in importance over the next five

to 10 years, as well as some

opportunities:

Emerging topics

> Climate change

> Data privacy and security

> Macro-economic and

geopolitical risks

Opportunities

> Advocacy and collaboration in

technology innovation

> Sustainable travel and tourism

> Inclusion and Diversity

MATERIALITY MATRIX (WEIGHTED)

NEXT STEPS

We will use the outcomes of the

process to support our strategic

aspiration to be leaders in

sustainability in our sector.

Many of the highlighted issues are

already part of our Group and

Sustainability strategic plans and

underlying governance structures.

The materiality assessment

outcomes reiterate the need to

double down on those areas and

highlight where we need to

strengthen our efforts.

We will use the findings to improve

stakeholder engagement and

communications, and align with

emerging mandatory reporting

standards. We are already using

insights from the assessment to

prepare for future regulatory

obligations such as the EU CSRD,

and to inform a comprehensive

supply chain due diligence exercise

to identify impacts, manage risks

and ensure compliance with

reporting requirements.

The insights will be integrated into

our Enterprise Risk Management to

enhance internal collaborations and

governance structures.

We aim to distinguish between

materiality topics that are to be

managed and those where we

intend to lead, being mindful of the

emerging topics and opportunities,

and using the outcomes of this

stakeholder engagement to refine

our Social Impact strategy.

One of the most exciting

opportunities is around

recruitment and retention,

and creating a sense of purpose

by being a business at the

forefront of a transition in

a challenging industry.

Business partner

You get much better results

with inclusive or diverse teams,

not just trying to fill a criterion

but seeing genuine difference.

Board member

MATERIALITY MATRIX EXPLAINED

This matrix summarises the overall

result of easyJet’s 2023 double

materiality assessment. It takes

into account two criteria: internal

and external stakeholders’ views

on the financial impact of the

sustainability topic on the

business (horizontal axis) and the

impact of our business operation

on society and the environment

(vertical axis). We consulted a

range of stakeholders to gather

qualitative and quantitative data

about both perspectives. The

most critical topics are ‘Climate

change’ and ‘Customer safety

and security’ in the top right

corner, reflecting their ongoing

prominence in society and

business. Other governance-

related topics such as

‘Responsible governance’,

‘Business ethics’, and ‘Responsible

marketing practices’ were placed

in the middle of the matrix,

indicating the ongoing

importance of these business

fundamentals. Similarly, social

topics like ‘Workers in the supply

chain’, ‘Employee health, safety

and wellbeing’ and ‘Diversity,

equity and inclusion’ also remain

highly material. What has gained

prominence this year is ‘Customer

satisfaction and accessibility’,

‘Data privacy and cybersecurity’,

‘Talent attraction and retention’,

and ‘Sustainable travel and

tourism’, reflecting the increasing

stakeholder interests and

concerns in these areas in the

post-pandemic world.

Societal and environmental impact

Financial/business impact

Customer safety and security

Climate change

Data privacy and cybersecurity

Customer accessibility and satisfaction

Sustainable travel and tourism

Employee health, safety and wellbeing

(including labour rights)

Talent attraction and retention

Business ethics

Responsible governance

Advocacy and collaboration on

technological innovation

Responsible marketing practices

Diversity, equity and inclusion

Workers in the supply chain

Macro-economic and geopolitical risks

Local air pollution and noise management

Waste and water management

Contribution to local economics

and communities

All 17 topics were rated highly material to easyJet as plotted in the top right quadrant of the matrix

and is demonstrated in the smaller graph to scale.

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Annual Report and Accounts 2023

SUSTAINABILITY (CONTINUED)

Reducing Our Impact

in the Air

OVERVIEW

As an interim goal on our net zero pathway, we

have established a target of 35% greenhouse gas

(GHG) emissions intensity reduction by 2035

(against a FY19 baseline). This ambitious target,

validated by the Science Based Targets initiative

(SBTi), was a first for low-cost carriers worldwide.

In FY23, we have made significant progress

against this target, delivering a 5% reduction

versus FY19, a saving of over 500,000 tonnes of

e (well-to-wake). This was driven primarily by

fleet renewal, with 10 NEO aircraft joining the fleet,

and strong performance of operational efficiencies

led by Descent Profile Optimisation (DPO) and

Continuous Descent Approach (CDA). We also

recorded our lowest ever CO

intensity of

67. 2g CO

/RPK.

WHAT WE ARE DOING TO REDUCE CARBON

Efficient aircraft

easyJet is proud to hold one of the largest fleets

of A320neo family aircraft in Europe. By the end

of FY29, we aim to take delivery of a further 158

brand new NEO (New Engine Option) A320 and

A321 aircraft, at a combined list price of $19 billion

– with 69 already part of the fleet. Equipped with

CFM International’s LEAD-1A engines, NEOs offer

at least a 15% boost in fuel efficiency and provide

a 50% noise reduction compared to the CEO-type

(Current Engine Option) they replace, and produce

significantly less NOx. This switch to more

fuel-efficient aircraft, as well as upgauging to

larger aircraft with more seats, has a significant

impact on reducing carbon emissions in the short

term due to both higher absolute fuel efficiency

and lower emissions per seat.

Complementing this upgrade, since 2013 our

A320ceo aircraft have been delivered with

‘Sharklet’ wingtips. Also fixed as standard on

NEO models, these reduce drag and fuel-burn

by up to 3% per hour flown. We’ve managed a

further boost in efficiency by having 93% of our

A320 fleet delivered with, or retrofitted, to the

increased density Spaceflex configuration. This

reconfiguration has freed up space in the rear

REDUCING OUR

IMPACT TODAY

FOR A BETTER

TOMORROW

We work tirelessly to minimise the

environmental impact across our

operations. Our focus is to reduce the

carbon intensity of our flying but we

are also addressing our noise impact,

enhancing our environmental

performance, tackling waste and

reducing the use of plastics

throughout the business.

galley to create room for six additional seats per

plane. Regular passengers will notice the seats of

these aircraft have also had an upgrade –

converted to a slimline lightweight Recaro design

(standard on all NEO deliveries), which has further

reduced the weight and fuel burn of the aircraft.

For a full fleet profile, see page 2.

Operational improvements and efficiencies

We continue to operate our aircraft as efficiently

as possible and are always looking for further

efficiency improvements to reduce fuel burn and

therefore carbon emissions. Our initiatives cover

the whole flight profile from departure to arrival.

This is accompanied by a variety of partnerships

to improve flight efficiency including those with

Airbus, Collins Aerospace, NATS and Eurocontrol.

While we continue to be progressive and invest in

new technologies to improve efficiencies, safety

continues to be our first priority. All new measures

are therefore closely scrutinised and taken only

when safe and practical to do so, and within the

parameters of the operational environment. We

are harnessing the power of AI and big data

through initiatives such as the deployment of the

SkyBreathe fuel management tool. This solution

automatically collects and analyses data from the

easyJet fleet and combines them with data from

other sources such as weather conditions and air

traffic control to identify the most relevant

fuel-saving opportunities. This enables the

implementation of the most efficient operational

procedures on the ground and in the air.

Engine

washing

Cost index

optimisation

Descent Profile

Optimisation

Reduced auxiliary

power unit usage

SkyBreathe fuel

management tool

Advanced weather

information

Speed

adherence

Optimised cruise and

descent winds

Aircraft performance

monitoring

Continuous Descent

Approach

Reduced acceleration

altitude

Departure En route Arrival

Reduced auxiliary

power unit usage

Refined taxi

fuel calculations

Reduced

flap landings

Single

engine taxi

Delayed

engine start

Single

engine taxi

OUR CARBON REDUCTION INITIATIVES

We publish a range of ESG factsheets on

our website to be read alongside the

2023 Annual Report and Accounts. The

factsheets provide further data and

information on: human capital; safety,

quality, and governance; digital safety,

and environmental management. Go to:

corporate.easyJet.com/sustainability

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SUSTAINABILITY (CONTINUED)

AIRSPACE MODERNISATION

Airspace modernisation has the potential for

significant carbon reductions in the short and

medium term and will be critical to addressing

non-CO

global warming effects. It must be

addressed at a national and pan-European level and

is crucial for a more environmentally-optimised and

efficient air traffic management system. 

easyJet is laying the foundations to be equipped

for optimised European airspace as the first airline

evaluation partner for Iris, the groundbreaking air

traffic management programme led by Inmarsat,

the global leader in satellite communications, the

European Space Agency and Airbus.

Iris enables new air traffic management

functionalities such as trajectory-based operations

which will enable controllers to manage a flight as

a single trajectory as opposed to a series of

discrete paths. This will help aircraft to avoid

holding patterns, calculate shortest available

routes and evaluate optimum altitudes. The

additional communications capacity provided by

SwiftBroadband-Safety (SB-S) powers a host of

powerful onboard digital applications, such as AI

flight profile optimisers and real-time weather

applications. easyJet has now received six out of 11

IRIS-equipped Airbus NEO aircraft with trials

expected to start in the first half of FY24.

We are working with stakeholders and public

authorities in the UK and across Europe to

advocate for the modernisation of airspace.

Projects include the Single European Sky, which

has a stated ambition to deliver 10% carbon

emissions savings from European aviation. easyJet

engages with key stakeholders in Brussels through

its membership of the A4E’s Airspace Working

Group. easyJet is a partner on the HERON project,

a three-year programme led by Airbus as part of

the SESAR Joint Undertaking which coordinates

and concentrates all EU research and

development activities in air traffic management

with innovative procedures that range from more

efficient aircraft operations to optimised

management of air traffic during flights.

NOISE

easyJet continues to work to reduce the noise

impact of our aircraft and flights, helped by the

acquisition of newer, quieter Airbus A320neo and

A321neo aircraft, powered by CFM LEAP-1A engines,

that meet ICAO Chapter 14 regulations. In total 48%

of our fleet are Chapter 14 certified with the

remaining 52% Chapter 4 certified. 

Flight crew use specialist techniques to minimise

noise, adhering to noise abatement procedures

and flying continuous descent approaches. 

We investigate any concerns raised relating to

noise. This helps us understand how we can

improve procedure design and flight planning to

reduce the impact of noise.

AIRPORTS

This year we extended our airports environmental

programme to include London Gatwick Airport,

London Luton Airport, Edinburgh Airport and

EuroAirport Basel Mulhouse Freiburg alongside

Bristol and SEA Milan airports. These partnerships

aim to test and define how airlines and airport

operators can work in a more carbon-efficient and

sustainable way. The collaborations explore the

use of Sustainable Aviation Fuels, improvements to

recycling and waste management, more

sustainable ground service equipment, flight

operations improvements, employee carbon-

saving initiatives, including travel to work, and

research partnerships on the infrastructure

associated with the transition to hydrogen.

INTERNAL CARBON PRICE

We set an internal carbon price, based on ETS

costs, for monitoring and evaluating compliance

obligations. Using the internal carbon price we can

track the obligation costs now and in the future.

The internal carbon price is input into easyJet’s

master financial models that drive the five-year

financial plan, 10-year funding model and budget.

These financial models forecast route profitability

and therefore influence both near and long-term

commercial decisions such as the routes that

easyJet operates and the frequency of service.

The internal carbon price also has a material

influence on the fleet plan, which defines the

number and type of aircraft in the easyJet fleet,

and on fleet-related capex as a result.

CASE STUDY

optimising

descent

We’ve made a multimillion-pound investment

in upgrading our planes’ software to minimise

fuel burn and emissions during descent to a

destination airport. easyJet uses two software

upgrades, DPO and CDA, which enable the

aircraft’s onboard computer to calculate and

operate a minimum fuel burn descent trajectory,

which also minimises emissions. easyJet now

has DPO/CDA installed on 332 aircraft and

has the largest DPO/CDA-enabled fleet in

the world.

Final descent

point

Longer cruise phase

at higher altitude

c.1% fuel saving

per flight

Reduced crew

workload

Reduced

noise

Non-optimised flight trajectory

Flight trajectory with DPO only

Flight trajectory with both DPO and CDA

OPTIMISED DESCENT THROUGH SOFTWARE UPGRADES

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SUSTAINABILITY (CONTINUED)

Greenhouse gas and energy performance

FY23 FY22

Global

emissions

UK-only

emissions

Global emissions

(excluding UK)

Global

emissions

UK-only

emissions

Global emissions

(excluding UK)

Scope 1 – tonnes of CO

e 7,517, 92 5 2,752,970 4,764,955 6,421,434 2,601,877 3,819,557

Scope 2 – tonnes of CO

300 5 295 0 0 0

Total Scope 1 and 2 – tonnes of CO

e 7,518,225 2,752,975 4,765,250 6,421,434 2,601,877 3,819,557

Scope 3 – tonnes of CO

2,303,152 1,660,512

Total carbon footprint – Scope 1, 2 and 3 tonnes of CO

e 9,821,377 8,081,946

Scope 1 energy use (kWh) 30,554,375,959 11,298,307,349 19,256,068,609 25,911,221,182 10,498,872,319 15,412,348,863

Scope 2 energy use (kWh) 6,084,730 4,065,111 2,019,619 3,246,789 3,246,789 0

Total energy use (kWh) Scope 1 and 2 30,560,460,688 11,302,372,460 19,258,088,228 25,914,467,971 10,502,119,108 15,412,348,863

Voluntary carbon credits retired, tonnes of CO

e 2,808,879 6, 497, 911

1) Year-on-year change in Scope 2 emissions was driven primarily by the opening of the new maintenance hangar in Berlin, Germany.

2) UK-only emissions cover emissions from flights operating under our UK Air Operating Certificate.

3) Scope 3 figures exclude the following GHG protocol categories as they are not applicable to easyJet: (9) Downstream transportation and distribution (13) Downstream leased assets

(14) Franchises. Categories (10) Processing of sold products and (11) Use of sold products are not deemed to be material for easyJet and are also excluded.

Scope 1 GHG emissions/revenue passenger kilometre due to aviation fuel

FY23 FY22

easyJet plc

gCO

/RPK

easyJet plc

gCO

e/RPK

easyJet plc

gCO

/RPK

easyJet plc

gCO

e/RPK

Carbon emissions/revenue passenger kilometre 67.23 67.84 70.36 71.07

Scope 1 CO

/RPK due to aviation fuel

emissions due to combustion of aviation turbine fuel per revenue passenger per kilometre travelled on revenue flights.

Scope 1 CO

e/RPK due to aviation fuel

GHG emissions CO

, N2O and CH4 due to combustion of aviation turbine fuel per revenue passenger per kilometre travelled on revenue flights.

Well-to-wake GHG emissions/revenue tonne kilometre due to aviation fuel (aligned with the SBTi target)

FY23

easyJet plc

gCO

e/RTK

FY22

easyJet plc

gCO2e/RTK

Well-to-wake GHG emissions/revenue tonne kilometre (aligned with the SBTi target) 882 909

Well-to-wake CO

e/RTK

GHG emissions including CO

, N

O and CH

due to Scope 1 (combustion) and Scope 3 Category 3 (extraction, processing and distribution) of aviation turbine

fuel per tonne of revenue payload per kilometre travelled on revenue flights – as required by the SBTi.

OUR CARBON PERFORMANCE IN 2023

TOTAL AND INTENSITY

Our total GHG emissions from the fuel used in our

flights was 7,515,806 metric tonnes CO

e in FY23

compared to 6,390,927 metric tonnes CO

e in

FY22. The FY23 figure is higher than FY22

reflecting the market recovery from the effects of

the pandemic. In FY23 we recorded our lowest

ever carbon intensity of 67.23gCO

/RPK as 10 more

Airbus NEO aircraft joined our fleet, taking our

fleet composition to 20% NEO, and made

significant progress in implementing operational

efficiency initiatives. This included the rollout of

DPO and CDA software across all 332 compatible

aircraft in our fleet. We have also reduced our

well-to-wake GHG emissions per revenue tonne

kilometre by 5% versus FY19, making a very strong

start towards our SBTi-validated interim target of

35% reduction in emissions intensity by 2035.

The increase in Scope 3 emissions has been driven

by an increase in capacity and customers at

easyJet and easyJet holidays, an increase in the

number of new aircraft delivered in the year, and

an improvement in the granularity, methodology

and data sources used by EcoAct to calculate

Scope 3 emissions (excluding Scope 3 Category 3).

THIRD-PARTY VERIFICATION

Our absolute emissions and intensity metrics are

verified by a third-party specialist auditor, Verifavia,

who are a leading verification body for aviation.

Verifavia used a reasonable assurance approach to

review easyJet’s 2023 financial year aircraft fuel

burn, Revenue Passenger Kilometres, Revenue

Tonne Kilometres and associated output CO

and

e key performance indicators. In FY23, the

verified emissions equated to 92% of easyJet’s

GHG emissions footprint and included Scope 1,

Scope 2 and Scope 3 Category 3 (upstream

emissions due to fuel usage). 99.97% of easyJet’s

Scope 1 and Scope 2 emissions are attributable to

use of aviation turbine fuel.

Verifavia’s detailed assurance statement is

available at corporate.easyJet.com/sustainability

KEY DEFINITIONS

Revenue passenger

A revenue passenger is a passenger for whose

transportation an air carrier receives commercial

remuneration, as defined by the Sustainability

Accounting Standards Board (SASB).

Revenue Passenger Kilometres (RPK) is defined

as the cumulative total kilometres travelled by

revenue passengers.

Revenue tonne

Tonne of revenue generating payload.

easyJet does not carry any cargo and therefore

the revenue tonnes are calculated assuming

100kg average for each passenger and luggage

as per SBTi guidance.

The GHG Protocol categorises emissions in

three scopes:

Scope 1

Direct emissions from owned and leased assets

(typically combustion of fossil fuels). Also

included are fugitive emissions from chillers

and air-conditioning equipment.

Scope 2

Indirect emissions from imported energy

(typically grid electricity) used in assets where

easyJet has direct operational control.

Scope 3

All other indirect emissions resulting from

upstream and downstream business activity

such as supply chain, business travel and

aircraft components.

A breakdown of our FY23 Scope 3 emissions

can be found in our ESG environment fact sheet

at corporate.easyJet.com/sustainability

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SUSTAINABILITY (CONTINUED)

CARBON EMISSIONS METHODOLOGY

The measurement and reporting of our GHG

emissions are aligned to the EU, UK and Swiss

Emissions Trading Schemes (ETS), the GHG

Protocol, and the recommendations of the Task

Force on Climate-related Financial Disclosures

(TCFD) see pages 54 to 57. Our GHG emissions

metrics also meet the UK Government’s

Streamlined Energy and Carbon Reporting

requirements, 2019. easyJet measures and reports

GHG emissions footprint in tonnes CO

and CO

(carbon dioxide equivalent, i.e. CO

, N

O and CH

easyJet uses the operational control approach, in

which we include emissions from activities where we

control the operation.

Scope 1, Scope 2 and Scope 3 Category 3

(extraction, processing and distribution of aviation

turbine fuel) emissions are calculated in-house by

easyJet’s Sustainability, Finance and Flight

Operations teams, are third-party verified, and

equate to 92% of our total GHG emissions footprint.

This year we have worked with EcoAct, a global

climate change and sustainability consultancy, on

our carbon mapping work. EcoAct has carried out

carbon mapping on all applicable Scope 3 emissions,

excluding Category 3 (equating to 8% of our total

GHG emissions footprint), and reviewed the

calculations carried out by easyJet’s in-house teams. 

Our carbon intensity calculation method aligns to

industry norms, i.e. ETS requirements. We adopt

Great Circle Distance (GCD) with a fixed correction

factor for each sector, as endorsed by ETS and

ICAO. This approach enhances the accuracy of

distances flown. Each flight records completed

data, fuel, passengers and GCD, with regular

internal checks for data quality. Department for

Environment, Food and Rural Affairs (Defra) GHG

Conversion Factors from June 2023 were applied

for reporting.

For further details on our carbon emissions

methodology, see the ESG environment fact sheet

at corporate.easyJet.com/sustainability

NON-CARBON DIOXIDE EFFECTS

easyJet recognises the impact of non-CO

effects

caused by contrail cirrus and their contribution to

global warming. There is uncertainty around the

magnitude of the impact, particularly on individual

flights, which contrasts with the clear correlation

between CO

-induced warming and fossil fuel

burn. There is an urgent need for more funding,

data and research to quantify these effects and

develop ways of minimising aviation’s overall

impact on climate change. Airspace modernisation

will be critical to mitigating contrail cirrus warming

through optimised routings. In 2023, we have

conducted trials with NATS, Airbus and

Breakthrough Energy to assess predictive models

to evade high contrail risk regions. We have also

joined Project CICONIA, part of EU Single

European Sky ATM Research 3 (SESAR3).

NOx and other particulates also affect local air

quality. The levers of our net zero roadmap – fleet

renewal, operational efficiencies, airspace

modernisation, SAF and zero carbon emissions

aircraft – aim to address both CO

and

non-CO

effects.

CARBON OFFSETTING

In September 2022, we announced our transition

from investment in voluntary carbon offsetting to

supporting the new technologies that will facilitate

delivery of our net zero roadmap see pages 20

and 21, such as our hydrogen engine partnership

with Rolls-Royce and scaling Direct Air Carbon

Capture and Storage with Airbus and 1PointFive. 

From 1 January 2023, we ceased to offset new

bookings, although we continued to honour our

carbon offset commitment to customers who

booked up to and including 31 December 2022. In

relation to carbon emitted during FY23, we retired

2,808,879 voluntary carbon credits, all certified to

either Gold Standard or VCS (Voluntary Carbon

Standard). These carbon credit certificates are

available at corporate.easyJet.com/sustainability

From January 2023, we made an optional carbon

compensation facility available to customers via

our partners South Pole. 

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SUSTAINABILITY (CONTINUED)

OVERVIEW

As well as reducing our environmental impact in

the air, our commitment to reducing our impact

on the ground is managed through our IATA

certified Environmental Management System

(EMS), through which we systematically prioritise

and address environmental impact across the

breadth of our operations.

ENVIRONMENTAL MANAGEMENT SYSTEM

We maintained our Stage 2 registration under

the IATA Environmental Assessment Programme

(IEnvA), an EMS accreditation programme aligned

with internationally recognised environmental

management standard ISO 14001:2015. IEnvA was

specifically developed for the aviation sector to

independently assess the commitment of aviation

stakeholders to continuously improve their

environmental performance. IEnvA Stage 2

Standards represent the highest level of IEnvA

compliance and require an airline to demonstrate

ongoing environmental performance

improvement.

We were the first low-cost carrier operating in

Europe with an IEnvA Stage 2 certified EMS and

the first non-IATA member to participate in the

IEnvA certification process. 

easyJet’s Environment Policy can be found at:

corporate.easyJet.com/sustainability

WASTE MANAGEMENT

We generate a variety of waste streams in our

operations and are committed to reducing waste

across all our activities. We always try to apply the

waste hierarchy (reduce, reuse, recycle and

recover) to minimise the impact of waste. A prime

example of this is where we cannot avoid

single-use-plastics, we work with our suppliers to

ensure that these plastics are diverted from landfill

or incineration. For example, 1.9 million plastic

seals, equivalent to six tonnes, have been diverted

from incineration since our supplier TydenBrooks

began a recycling trial at Gatwick in 2022. The

seals cannot be avoided or reduced due to Civil

Aviation Authority (CAA) requirements, so a supply

chain solution to recycle the plastic has been

sought. Our supplier processes the seals into

recycled plastic pellets, which are reused to make

components in the automotive industry. 

Waste generated in easyJet operations

(excluding onboard waste)

In our offices we segregate recyclable waste

streams such as paper and cardboard, aluminium

cans, plastics and food waste. In FY23, in our Luton

campus, we achieved 100% landfill diversion. In

FY23, we generated 30% more waste than in FY22,

which is due to increased activity at all of our bases

and office locations post-pandemic.

Waste type

Metric tonnes

FY23

Metric tonnes

FY22

Total waste generated 354.01 272.78

Total general waste 245.73 191.91

Total hazardous waste 108.28 80.87

Total reused, recycled,

and recovered 288.34 –

Hazardous waste

Hazardous and non-hazardous waste is generated

in our Engineering & Maintenance operations. For

easyJet, the main types of hazardous wastes we

produce include:

> waste oils and fuels

> oil contaminated containers, rags, gloves and

cardboard

> electrical and electronic equipment waste (WEEE)

> batteries and accumulators

> fluorescent tubes.

We are committed to ensuring that all hazardous

waste is appropriately managed in accordance

with local requirements and any risks to human

health and the environment are minimised. We

have a procedure for waste segregation to ensure

hazardous waste is not allowed to contaminate

any other waste stream. We apply the waste

hierarchy to the way we manage hazardous waste,

giving priority to waste prevention (avoid creating

waste in the first place), and reusing and recycling

where possible. For example, cardboard is reused

for transporting engineering parts, and cleaning

cloths are made from recycled clothing materials.

Onboard waste

Airlines and passengers have a strong desire to reuse

and recycle. We communicate regularly with our cabin

crew community, emphasising the importance of

waste segregation. Training on waste segregation and

recycling is part of our cabin crew new entrant course.

The management of the disposal of our onboard

waste is typically handled by our ground handling

and cleaning contractors. Waste is taken to

appropriate disposal facilities at airports, with

some materials being recovered for recycling and

some being sent to landfill or incinerated.

Under the International Catering Waste (ICW)

legislation, UK-EU waste interpretation labels all

onboard waste as ICW, leading to unnecessary

incineration or landfill. In 2023, we supported trade

associations’ (Airlines UK and IATA) campaigns for

smarter regulation of ICW in aviation.

In FY23, we simplified waste segregation procedures

on board to improve the quality and legal compliance

of recycling collected. We continue to discuss these

issues of waste with partners at our base airports to

drive improvements in waste segregation and increase

recycling rates and we now are able to recycle at 50%

of our bases (versus 31% at FY22 year end). Working

with SEA Milan Airports, we carried out an analysis

of onboard waste in FY23 which showed that

58.5% of waste materials generated per flight are

recyclable.

Onboard waste generated across the network

Metric FY23 FY22 FY21

Waste per passenger

(kg/pax)

0.09 0.07 0.08

Total onboard waste

(thousand tonnes)

7.27 4.92 1.61

1) Average waste generated per passenger was calculated

based on the total cabin waste generated from aircraft

operations at Luton Airport and the number of arriving

passengers.

2) Total onboard cabin waste generated, including recycling,

general waste and international catering waste,

calculated using average waste per passenger and the

total number of easyJet passengers carried.

Reducing our Impact

on the Ground

The total onboard waste produced has increased

year on year in line with passenger numbers. We

continue to make changes to our in-flight

food and drinks service to reduce the number

of single-use plastics and excess packaging used

in our flights. For example, this financial year we

conducted an analysis on Airbus A319 and Airbus

A320 and achieved 29% reduction in dry store

pack contents, while an Airbus A321 review

achieved 16% reduction.

In FY23, we trialled reusable cups and cutlery for

crew meals, which has a potential to save over

10 million single-use items per year. This will be

rolled out to all crew in the first quarter of FY24.

SUSTAINABLE PREMISES

easyJet has direct operational control over nine

sites – seven in the UK and one each in Germany

and France. The majority of our UK sites operate on

100% renewable energy and do not drive any

carbon emissions under the market-based

approach. 

In FY23, we installed new energy-saving lighting in

our landside offices in Luton and changed the

heating system from LPG to electric. We also

installed an electric ventilation system. 

ELECTRIC VEHICLES

At the planning stages of the Berlin hangar build

project we took the decision to install electric

charging points with a view to turning the fleet

of vehicles in Berlin fully electric.

We carried out a successful trial last year with a

fully electric small line maintenance van and we

are now aiming to turn the whole Berlin fleet

electric by the end of FY24. Vehicles will be

changed over as they become available from the

manufacturer. We are working with our supplier to

start the transition to electric in the UK.

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SUSTAINABILITY (CONTINUED)

PIONEERING

FUTURE TRAVEL

OVERVIEW

Partnerships are key to achieving our ambition to

be a leader in decarbonising aviation. The past

year has seen significant technology progress

across our partnerships, from the successful

hydrogen aero engine tests with Rolls-Royce, to

Airbus pushing boundaries to address the

operational requirements of hydrogen aircraft and

infrastructure. With our collaborations such as

Hydrogen in Aviation and Hydrogen South West

we are working to identify frameworks for

hydrogen policy, regulation, safety and the

infrastructure ecosystem required to scale use of

hydrogen in aviation. Meanwhile we are investing

to scale Sustainable Aviation Fuel and Carbon

Removal technology to address the emissions we

can’t reduce at source.

HYDROGEN – THE KEY TO SUSTAINABLE AIR TRAVEL

We recognise the impact our operations have on

climate change and that’s why we’re investing in

the development of new zero carbon emission

technologies that will not only reduce this impact

but also help protect the long-term future of our

industry and the huge socio-economic benefits it

provides to so many.

We believe hydrogen in particular is the future of

short-haul aviation and a significant component

that will help us reduce our carbon emissions

intensity by 78% by 2050, with residual emissions

addressed by carbon removal technology.

Hydrogen not only has no operational carbon

emissions, it also shows huge promise in reducing

non-CO

effects. It is only a matter of time before

the demand for hydrogen spikes, particularly in

hard-to-abate sectors like aviation, logistics and

heavy industry. This is why we helped establish the

Hydrogen in Aviation alliance – to capitalise on

hydrogen’s potential and ensure accessibility to

this important energy source keeps pace with

technological development. It’s also why we

continue to work with key cross-industry players

including Airbus, Rolls-Royce, GKN Aerospace and

Cranfield Aerospace Solutions to accelerate the

transition to zero emissions aircraft.

Hydrogen aircraft partnerships

Our groundbreaking partnership with Rolls-Royce

aims to pioneer the development of hydrogen

combustion engine technology. Both companies

have set out to prove that hydrogen can safely

and efficiently deliver power for civil aero engines,

including those suitable for narrowbody aircraft.

easyJet has invested in Rolls-Royce’s ground

demonstrator programme which aims to reach a

full ground test on a Pearl engine (see case study,

right). easyJet is also a consortium member of two

funded research projects led by Rolls-Royce –

HEAVEN (funded by EU Clean Aviation) and

LH2GT (funded by the UK Aerospace Technology

Institute (ATI)). Our support as an operator has

helped unlock funding worth tens of millions of

pounds for these programmes. We have a core

team of subject matter experts across the

business who work collaboratively with Rolls-Royce

to provide inputs from the operators’ perspective

to drive design specifications and develop

economic models.

We have been collaborating with Airbus since 2019

on the ZEROe programme which aims to deliver a

hydrogen-powered commercial airliner for entry

into service in 2035. This comprehensive

partnership spans the development of the design

and operational requirements of the aircraft and

the wider aviation hydrogen ecosystem. Airbus is

currently maturing two hydrogen-based propulsion

technologies in parallel. Hydrogen combustion and

hydrogen fuel cell systems are being developed for

flight testing on the A380 multi-modal test aircraft

in the middle of this decade. The journey to

hydrogen powered flight is being boosted further

by the Blue Condor project, a modified glider that is

being used to test hydrogen combustion at altitude

with a particular focus on contrail formation. 

easyJet has a collaborative partnership with GKN

Aerospace. We sit on the GKN H2GEAR External

Advisory Group, providing airline operational

insights to the programme, and a regular working

relationship with engineers to understand the

progress of technology development. The GKN

programme, H2GEAR, is developing a hydrogen fuel

cell propulsion system for a hypothetical 19, 48 and

96+ seat aircraft. The project is backed by a £54

million collaborative UK ATI/Industry investment to

accelerate aerospace decarbonisation.

We want to be a leader in the

decarbonisation of aviation in Europe

– our ultimate aim is to achieve zero

carbon emission flying. We are

committed to meeting our target of

net zero by 2050, are supporting the

development of new technologies to

achieve this ambition, and are strong

advocates for effective carbon

regulation.

CASE STUDY

hydrogen breakthrough

In November 2022, Rolls-Royce and easyJet set

a new aviation milestone with the world’s first

run of a modern aero engine on hydrogen,

conducted on a converted Rolls-Royce AE2100

engine. The engine was powered by green

hydrogen created by wind and tidal energy.

This is a major step towards proving hydrogen’s

use as a zero carbon aviation fuel and is a key

proof point in the decarbonisation strategies of

both Rolls-Royce and easyJet.

Progress is being made on components and

systems, with tests on a full annular combustor

of a Rolls-Royce Pearl 15 engine running on

100% hydrogen. This world-industry first proved

that hydrogen can be combusted at conditions

that represent maximum take-off thrust.

Learnings from the Pearl 700 tests and the

AE2100 tests will be combined for the next

stage – a full gas hydrogen ground test on a

Pearl engine, followed by a full ground test on

a Pearl engine using liquid hydrogen. easyJet

and Rolls-Royce have a shared ambition to

then take the technology to flight.

2023 Rolls-Royce

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SUSTAINABILITY (CONTINUED)

Hydrogen in Aviation alliance

easyJet is a founding member of the Hydrogen in

Aviation (HIA) alliance which brings together

leading companies in the UK to help deliver zero

carbon aviation. Alliance members include easyJet,

Airbus, Rolls-Royce, GKN Aerospace, Bristol Airport

and Ørsted.

The HIA plans to draw upon its considerable

expertise to propose a clear and deliverable

pathway to achieving hydrogen-powered flights in

the UK by scaling up the infrastructure and the

policy, regulatory and safety frameworks needed,

so that large-scale hydrogen aviation can become

a reality.

We hosted the launch of the HIA at a

parliamentary reception in the House of Commons

in September 2023, attended by the Secretary of

State for Transport, crossbench MPs, academics

and hydrogen experts, to promote the use of

hydrogen in aviation.  

Hydrogen ecosystems

We are collaborating with partners to develop

hydrogen ecosystems – the infrastructure and

technology required to enable commercial zero

carbon emission flying at scale.

We are a founding board member of Hydrogen

South West (HSW) – a business-led infrastructure

ecosystem for the accelerated production,

transportation and use of hydrogen.

We are collaborating with HSW partners to

determine how Bristol Airport can become a

hydrogen hub. This project brings together a

network of hydrogen experts to assess local and

global hydrogen supply chains, forecast future

hydrogen powered aircraft traffic and explore how

a hydrogen supply at Bristol Airport could also

power other forms of transport, such as HGVs and

other heavy vehicles. By bringing together the

airport, easyJet, Airbus and hydrogen generator

EDF Hynamics, the project creates a unique

partnership to assess how hydrogen technology

can be best used under ‘real world’ conditions.

SUSTAINABLE AVIATION FUEL

We believe zero carbon emission (likely hydrogen-

powered) aircraft are the future of short-haul

aviation and key to helping us achieve net zero.

However, it’s clear that while this technology

develops and before it becomes widely available,

we will require a number of different solutions to

decarbonise the sector.

Sustainable Aviation Fuel (SAF) in particular will be

an important interim solution until our fleet can

fully transition to zero carbon emission aircraft

and is achieving a material reduction in emissions

compared to kerosene. easyJet is already using

SAF in France in line with the French national

mandate for SAF use on domestic routes.

One of the challenges the industry currently faces

is the limited availability and high cost of SAF

compared to conventional jet fuels. This is why we

are working closely with our fuel suppliers to ensure

we can fly on increasing amounts of SAF across our

network over the coming years – with Q8 Aviation

having agreed to supply us with SAF until 2027.

This will not only help us in our path to net zero, it

will ensure we meet the requirements of the SAF

mandates set by the UK and EU, as well as those

set by individual EU member countries such as

France. Both zero emission technology and SAF

are in their infancy but investment into both will be

vital in securing availability and affordability in the

longer term. For instance, as short-haul airlines

adopt zero carbon emission technology, pressure

on SAF supply chains will ease. This will boost SAF

supply levels, enabling long-haul airlines to use

higher blends of SAF and helping to decarbonise

the whole industry in the process.

SAF will therefore play a significant role across

the industry for decades to come and is a

complementary factor to our longer-term

ambitions. It’s because of this that we believe

there should be strict sustainability standards set

for the sourcing of alternative fuels for use in

aviation. To this end, we have signed joint

statements that appeal to the EU to prevent

unsustainable feedstocks and food-grade

agricultural land being used to produce aviation

biofuels, as well as any use of palm oil that is not

responsibly sourced. We are also actively pursuing

new opportunities for alternative fuel sources to

diversify our pricing and supply risk.

CARBON REMOVALS

Direct Air Carbon Capture and Storage (DACCS)

is an essential element of our net zero roadmap,

necessary for addressing the residual carbon our

aircraft will emit through to 2050 and beyond. It is

a high-potential, nascent technology, which aims

to capture carbon dioxide directly from the

atmosphere and store it securely and durably in

geological formations. Carbon capture is also

critical for production of power-to-liquid (PtL) SAF.

In FY23, easyJet actively championed the scaling

of this emerging industrial sector by finalising a

contractual agreement with Airbus to supply us

with carbon removal credits from the 1PointFive

DACCS plant in Texas FY26 to FY29. Meanwhile,

we support the UN, UK and EU intent to include

these carbon removal credits as eligible under

CORSIA and ETS, once methodologies for

certification and trading mechanisms have been

established.

A key technology advancement being developed

by GKN is a hyper-conducting electrical distribution

and drive system which will help unlock the route to

hydrogen fuel cell powered aviation through its

higher efficiency and lower mass power system.

easyJet also has a collaborative working

relationship with Cranfield Aerospace Solutions for

Project Fresson. Cranfield Aerospace Solutions is

currently developing a zero-emissions, hydrogen

fuel-powered aircraft. It is one of very few

aerospace SMEs globally to have both whole

aircraft design capability, and to hold a range of

regulatory approvals for the design and

manufacture of modifications to existing aircraft.

As part of the first phase of the project, the

company is converting a Britten Norman Islander

nine-seat aircraft to gaseous hydrogen propulsion

via a fuel cell and electric motor. The solution will

be emissions free and aims to be certified for

passenger flight by 2026. After the nine-seat

Islander, Cranfield has a multi-phase programme

that includes larger aircraft up to and including

75+ seat regional aircraft.

Left: CEO Johan Lundgren meets Transport Secretary

Mark Harper at the launch of the Hydrogen in Aviation

alliance.

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Annual Report and Accounts 2023

Collaborating to drive

airspace modernisation

Sustainable

Aviation Fuel

DACCS

Supporting the development of

zero carbon emissions aircraft

Supporting the development and

scaling up of Direct Air Carbon

Capture and Storage

Developing the infrastructure

needed to support hydrogen

aircraft operations

Renewing and upgauging

our ﬂeet with NEO aircraft

Fuel and emissions savings

through a multitude of

operational initiatives

Long term SAF offtake

agreements with fuel suppliers

SUSTAINABILITY (CONTINUED)

Delivering net zero requires a collaborative effort across the aviation industry and beyond. Our net zero roadmap is supported

by a comprehensive range of partnerships spanning the aviation and energy value chains. Through these we are engaging

in tangible actions to reduce our energy use and emissions today, and pioneering future travel with new technologies

and fuels, as we guide easyJet towards net zero carbon emissions by 2050.

NET ZERO ECOSYSTEM

Strategic report

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Annual Report and Accounts 2023

SUSTAINABILITY (CONTINUED)

DRIVING

POSITIVE

CHANGE IN

SOCIETY

OVERVIEW

This year easyJet holidays invested in partnerships

with the United Nations World Tourism

Organisation (UNWTO) and Global Sustainable

Tourism Council (GSTC) to drive practical tools and

training to empower young people, tourism

businesses and their hotel partners to improve the

social, environmental and economic impacts of

tourism. Across the Group, we deepened our

engagement with our customers, our people and

wider stakeholders – especially policymakers – to

drive sustainable change. A particular focus and

growth area is our ‘early careers initiatives’,

encouraging and supporting the next generation

to embark on careers in aviation, including working

with establishments close to our operations.

PIONEERING SUSTAINABLE TOURISM

In 2021, easyJet holidays launched its inaugural

sustainability strategy focusing on three key pillars:

create better holiday choices – which is about

making sustainable travel affordable and accessible

to everyone; keep our holidays special – which is

maximising the benefits and minimising the

negative impacts of travel and tourism; and

transform travel for everyone – which means

embedding sustainability into business decisions

and behaviours and driving meaningful change in

the industry. Through our collaboration with the

Travel Foundation, the University of Oxford, and as

a member of the GSTC where our Director of

Customer & Operations sits on the board, easyJet

holidays is focused on building its research,

partnerships and hotel certifications, and taking

action to make a positive impact on the people and

places that make its destinations so special.

United Nations World Tourism Organisation

easyJet holidays has joined forces with the

UNWTO and the University of Oxford to help

develop the first ESG framework for tourism

businesses.

Based on UNWTO’s UN Statistical Framework

on Measuring Sustainable Tourism, the framework

for tourism business project brings together

businesses to co-design a tool to measure how

tourism businesses impact, and depend on,

people, planet and prosperity.

To support the creation of this tool, the UNWTO

and the University of Oxford have carried out a

comprehensive mapping of current work and

interviewed pioneering businesses in the

accommodation sector, along with further

research and development.

Through the easyJet holidays Sustainable Tourism

Programme, easyJet holidays continued work

throughout 2023 to equip Oxford graduate

students with the transferable skills needed to

identify and deliver solutions to help develop

sustainable travel.

Global Sustainable Tourism Council

easyJet holidays has partnered with the GSTC

to accelerate sustainability transformation in the

industry by sponsoring training in sustainable

tourism for its hotel partners in some of our key

markets: Spain, Greece and Turkey.

This training programme reflects easyJet holidays’

commitment to supporting hotel partners to

achieve GSTC-recognised certification within the

next five years. Certified hotels become part of

our ‘eco-certified’ collection, making it easier for

customers to make sustainable choices.

The GSTC Sustainable Tourism course aims to

support hotels on their journey to meet their

sustainability targets offering an excellent

opportunity to gain in-depth knowledge about the

GSTC criteria and sustainable tourism practices.

After completing the training, participants can

take an optional official exam to receive the GSTC

Professional Certificate in Sustainable Tourism, also

sponsored by easyJet holidays.

ENGAGING OUR STAKEHOLDERS IN SUSTAINABILITY

Building close relationships with our people, with

our customers – current and future – and with our

suppliers and industry peers on sustainability

issues is critical to creating a more sustainable

future. In FY23, we ran net zero masterclasses

across Europe to communicate the launch of our

net zero roadmap and our sustainability strategy.

These events, held in Italy, the Netherlands and

Spain, engaged multiple stakeholders, including

political figures and members of the media.

Discussions centred around policies and

recommendations. Future masterclasses are

planned for France, the UK and Germany.

Engaging with our people

As re-confirmed in our double materiality

assessment (see pages 41 and 42), our people

(easyJet colleagues) are not only extremely

passionate about sustainability, they play an

important role in shaping our strategy, raising

awareness of key issues and driving behaviour

change across our business. This year we have run

several internal events showcasing our work with

Rolls-Royce and Airbus which have furthered

learning and collaboration among colleagues. We

have also created a network of 40+ champions in

the cabin crew/pilot community who exchange

views and ideas on sustainability. This initiative is

helping to drive engagement in environmental

improvements (particularly in areas such as waste

minimisation and segregation).

We also have an active sustainability workplace

forum on our intranet with over 700 members,

where colleagues share ideas and exchange views

on sustainable aviation issues and easyJet’s

strategy. Sustainability features on our main

intranet forum ’Inside’, with materials, interviews

and links to events where our senior managers are

speaking. Colleagues’ commitment to the agenda

is reflected in the 99.8% of cabin crew who

completed our newly launched sustainability

module, and the 79% of engineering colleagues

who completed sustainability training launched

in March 2023.

Engaging our customers

We regularly communicate with our airline and

holiday customers about sustainability and we

have a section of our website dedicated to our

sustainability activities: corporate.easyJet.com/

sustainability. This year we engaged with over 600

customers during our double materiality exercise,

helping us understand the most relevant

sustainability topics and the impact we have.

easyJet was pleased to be one of just three airlines

invited onto Google’s Travel Impact Model (TIM)

Advisory Committee facilitated by the International

Council on Clean Transportation (ICCT). TIM is a

public and freely accessible tool that conveys per

passenger CO

emissions for upcoming flights, on

Google and other metasearch platforms. It is

important for us that customers are provided with

accurate, transparent and credible carbon

information.

We aim to have a positive impact

on our people, customers and

communities and to maximise the

social and economic benefits of

travel and tourism. We are focused

on making sustainable travel more

accessible, doing our best to be an

employer of choice by creating an

inclusive workplace, and supporting

charitable causes that are important

to our customers and employees.

Strategic report

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Annual Report and Accounts 2023

SUSTAINABILITY (CONTINUED)

Engaging the next generation

As an integral part of our strategy, the work we all

do towards reaching our destination of becoming

Europe’s most loved airline is made possible by our

people living out the different parts of our promise.

Our early careers initiatives centred around young

people are real examples of our commitment to

making a positive difference and making easyJet a

warm and welcoming place to start a career.

We have three main pillars to our focus

on early careers:

> Educate ourselves and others on the roles

and skills needed now and the future.

> Inspire the next generation on the

opportunities available to them especially

within travel and aviation.

> Grow our talent pipeline through a lens

of inclusion.

A few examples of our work:

School-age initiatives

> Local to our head office in Luton and our

biggest operational hub at London Gatwick, we

have partnered with local schools and councils

to provide eight Enterprise Careers Advisers that

work with the career leads of the school to

support the development of employability skills

and showcase the variety of careers available in

the travel and aviation sector.

> We offer work experience placements across

our business to the schools we partner with –

this year we provided around 30 placements.

> Through our visits programme, so far this year,

we have visited 15 schools, two colleges and

four university events, engaging with

approximately 1,700 young people aged 13–25.

> This summer we launched our first Summer

Flight School, allowing kids to get a taste of the

role of a pilot in a real Airbus A320 flight

simulator. Children and their parents were able

to go behind the scenes at our state-of-the-art

Gatwick training centre, and experience exciting

hands-on pilot and cabin crew training.

Apprenticeship and graduate opportunities

> We offer three specific pathways for graduates

via our Runway Graduate Programmes –

Engineering, Finance and Management – each

with an annual intake.

> We have an annual Engineering Apprenticeship

Programme and use apprenticeships throughout

the business in both office and operational roles.

Summer Flight School

Research reveals that 37% of children believe

piloting is a male-only job, 68% of girls believe both

genders can be pilots, but 28% of boys see cabin

crew as exclusively female. In fact, only 6% of

pilots globally are women, and while easyJet has

tripled the number of its female pilots since 2015,

there is still a long way to go. This year we have

launched a Summer Flight School to inspire

children aged 7–12 and to challenge gender

stereotypes in aviation careers. The initiative offers

hands-on experiences, including A320 simulator

control, in-flight service insights and conversations

with pilots and crew, blending education and

school holiday fun.

Fantasy Wings

easyJet has partnered with diversity-focused

youth organisation Fantasy Wings to enhance

opportunities for young people from minority

backgrounds and young women interested in

aviation careers. Through its career development

programme, we sponsor students in 50 UK

schools, providing practical skills, knowledge

training, mentorship and even flight training, which

enhance their prospects of getting into courses

such as engineering and flying. Selected students

receive a fully sponsored private pilot licence

course, covering training and examination fees.

Engaging with suppliers

We rely on around 3,000 suppliers to deliver

products and services, from customer facing

activities such as bookings and support to

back-office functions and we depend on the

assurance of these suppliers that they are meeting

our standards of sustainable procurement and

supply chain integrity.

In February 2023, we formed a working group of

managers from our Procurement, Sustainability,

Risk, Human Resources and Legal teams to review

improvements to existing controls and assurances.

We have a number of controls, pre-contractual

and contractual, to ensure our suppliers share our

commitment to human rights and sustainable

procurement, including on bribery, corruption,

sustainability, modern slavery and data protection.

Through our Supplier Code of Conduct we hold

our suppliers to the same high standards that we

apply to ourselves.

In August 2023, we engaged Deloitte to identify

any possible improvements in our existing controls

for identified ESG risks regarding third parties and

provide an implementation roadmap.

Combating modern slavery

easyJet is committed to combating modern

slavery through its policies, due diligence process,

risk assessment and management; key

performance indicators; and employee training –

as highlighted in our Modern Slavery Statement,

available at corporate.easyJet.com/sustainability

easyJet has its own Human Rights and Modern

Slavery Policy and asks suppliers that go through

tenders a number of questions on modern slavery,

including an agreement to comply with easyJet’s

Supplier Code of Conduct. This code strictly

prohibits any form of slavery, exploitation, child

abuse, or human trafficking in supplier operations

and supply chain in relation to any person.

We have a well-established cross-functional Modern

Slavery Working Group, comprised of senior leaders

from relevant areas, which updates our modern

slavery risk and identifies, monitors and mitigates

any modern slavery breaches. easyJet also provides

specific mandatory training for its cabin crew and

its head office.

CASE STUDY

Easier journeys

for customers

with disabilities

easyJet is committed to ensuring we deliver ease

and reliability to our customers with disabilities,

and the easyJet Assisted Travel Advisory Board

(EATAB) has recently been re-established and

reformed, post-pandemic, to oversee our

performance in this important area. The board

has a new structure and renewed commitment to

ensuring we make low-cost travel easy and deliver

ease and reliability to our customers with

disabilities or that need special assistance. It will

continue to be chaired by former UK Cabinet

Minister Lord David Blunkett.

The board advises us on the evolving needs of

passengers requiring special assistance – now

more than 750,000 people each year. It directly

contributes to ongoing improvements for

customers, such as the introduction of easyJet’s

onboard cabin aisle wheelchair. The board reviews,

challenges and improves our policies and

procedures in the area of accessibility.

In FY24, the board is planning to work with different

partners or charities and will be taking advice and

guidance from organisations that have expertise of

specific accessibility initiatives or challenges.

Strategic report

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Annual Report and Accounts 2023

Unicef

SUSTAINABILITY (CONTINUED)

Engaging with industry peers

We continue to engage with our industry peers

across the UK and Europe on how to address

carbon emissions and stimulate the technological

innovation that will be needed for zero carbon

emission aviation. Our CEO Johan Lundgren is a

member of the UK Government’s Jet Zero Council.

Members of our Sustainability, Policy and

Operations teams also participate in discussions

within the Council and its working groups. We also

participate in industry groups and forums that

contribute to public policy development in

sustainability. These include the Hydrogen in

Aviation alliance, Aerospace Technology Institute,

the Airspace Change Organisation Group, Airlines

for Europe, Airlines UK, the Aviation Council, the

Global Sustainable Tourism Council, Sustainable

Aviation, the World Economic Forum’s Target True

Zero coalition, and the EU-funded aviation

hydrogen projects – HEAVEN and LH2GT.

Aviation Industry Skills Board

As Aviation Industry Skills Board members, we

foster cross-industry collaboration to attract,

develop and retain aviation talent. We now chair

the AISB and advocate for apprenticeships’ role

in sector-wide talent strategies at the Aviation

Council. Our engagement extends to DfT-

commissioned research on pilot training costs,

and we chaired the trailblazer group for Level 3

Aviation Flight Operations Coordinator

Apprenticeship Standard development.

Engaging with policymakers

Our public policy positions promote effective

climate regulation and decarbonisation

technologies for aviation.

In 2022, we continued our engagements around the

EU’s Fit for 55 climate package and outlined how to

better uphold the ‘polluter pays’ principle

in environmental legislation for aviation. easyJet

advocated for greater coverage of the Fit for 55

proposals, by expanding climate measures to all

flights departing the European Economic Area (EEA),

to align all of aviation with net zero and protect the

sector’s licence to operate in the long run.

This year, we asked EU policymakers to expand

the scope of the EU’s Emissions Trading System to

all EEA departing flights, in line with our previous

joint statements with NGOs and other airlines. We

welcomed the conclusion of EU negotiations over

the EU’s Sustainable Aviation Fuel (SAF) mandate,

Refuel EU Aviation, and its non-discriminate

application within European aviation. We

continued to push for stringent sustainability

standards for SAF and coherent methodologies

around accounting for SAF in the ETS.

We advised the European Commission on how to

use EU ETS revenues dispensed through the EU

Innovation Fund to decarbonise aviation, including

through incentivising the adoption of hydrogen-

based propulsion. In the Netherlands, we

advocated for the modulation of the national

ticket tax so that it reflects emissions per

passenger and includes transfer passengers and

we succeeded in having this position considered

in a government report, increasing the probability

of modulation in future.

In both the EU and UK, we engaged with

authorities to best design eco-labelling

methodologies for aviation, ensuring they reflect

true emissions-per-passenger in an objective and

non-discriminatory way.

Our CEO is a member of the UK Government’s

Aviation Council which brings together industry

and government. The Aviation Council, set up

earlier this year, is chaired by Aviation Minister

Baroness Vere of Norbiton and has a strong focus

on airspace modernisation. Our Chief Operating

Officer is a member of the Airspace Change

Organising Group steering committee and is

helping to drive the required changes. In April, we

hosted the UK Aviation Minister at our Gatwick

simulator centre to visually demonstrate the

benefits of airspace modernisation. In September,

we launched Hydrogen in Aviation see page 49.

We continue to participate in the steering

committee of the EU’s Alliance for Zero-Emission

Aviation (AZEA) as well as its six working groups

and we are co-chair of the steering committee

support group. AZEA works to remove technical,

legislative and policy barriers to the adoption of

zero-emissions aircraft.

In the UK, we have engaged with the Department

for Transport and the Department for Energy

Security and Net Zero (DESNZ) over expanding

the UK ETS to all UK departing flights in line with

our EU positions. We supported the introduction

of the UK SAF mandate and recommended

the UK adopt similar incentives to support the

production and use of SAF, matching equivalent

systems in the EU.

Decarbonising aviation requires government

support to accelerate change. easyJet advocates

for public institutions to:

> Support the development of zero carbon

emission technology:

– Develop a regulatory framework which

incentivises aircraft manufacturers to produce

zero carbon emission aircraft and airlines to

adopt the technology.

– Create investment and financial incentives for

funding the development and scaling-up of

zero carbon emission technology.

– Recognise the role of green hydrogen in

aviation by incorporating the requirements of

aviation in UK and EU hydrogen strategies.

– Invest in renewable energy to support the

creation of green hydrogen for aviation.

– Incorporate hydrogen as a SAF equivalent in

EU and UK SAF mandates.

– Support the development of hydrogen supply

and infrastructure at airports.

> Ensure passenger taxes reflect emissions to

incentivise efficiency and the move towards

zero carbon emission aircraft.

> Expand effective carbon capping and pricing,

through the EU and UK ETS, to all EEA and UK

departures.

> Ringfence a portion of tax and ETS revenues to

decarbonise aviation.

> For the EU27 national governments to make

rapid improvements in national airspace

efficiency plus deliver on the Single European

Sky programme for airspace modernisation.

> For the UK government to deliver on its stated

ambitions for UK Airspace Modernisation.

> Recognition and incentivisation of the

contribution of carbon removal technology to

meet net zero targets. Carbon removal credits

should be equivalent to ETS allowances.

renewed

partnership

with unicef

This year, easyJet and UNICEF have entered a

new three-year charity partnership and

launched our new joint Sky’s the Limit

programme to address the safety, health and

welfare issues impacting children’s lives and

drive sustainable change across the world. We

launched our partnership with UNICEF in 2012

and so far easyJet customers and crew have

raised over £17 million in onboard donations,

helping UNICEF to protect millions of children

around the world from disease and keep them

safe during emergencies. This includes a

record-breaking £616,000 in a single month for

the Ukraine response in October 2022, and an

emergency collection launched in February

2023 in response to the devastating

earthquakes in Turkey and Syria, which raised

an incredible £400,000 in just three weeks for

children and their families affected by the

earthquakes.

CASE STUDY

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES

Our disclosures are consistent with the recommendations and recommended

disclosures of the Task Force on Climate-related Financial Disclosures (TCFD),

taking into consideration the TCFD all-sector guidance and the supplemental

guidance for non-financial groups for the transportation group.

GOVERNANCE

(a) The Board’s oversight of climate-related

risks and opportunities

Climate-related issues were discussed by the plc

Board through regular sustainability updates as well

as specific Board discussions to approve key

climate-related decisions including the proposed

Airbus fleet order, which included consideration of

the impact of the decision on CO

/RPK

performance, see page 99; for relevant Board

expertise, see page 83; for the frequency of

sustainability updates to the Board, which include

monitoring of progress against target, see pages 74

to 77. The Audit Committee has reviewed the

climate transition risks during the year as part of its

review of principal risks, as set out in its report on

page 104. Additionally, climate-related issues are

regularly discussed by the Airline Management

Board (AMB), the executive committee of the

functional leaders across the Group. The AMB is led

by the CEO, who is a member of the plc Board and

is ultimately responsible for climate-related issues.

The AMB’s members (which includes the CFO, who is

also on the plc Board) are collectively responsible for

assessing and managing climate-related risks and

opportunities, and use regular updates on

performance versus targets to drive the performance

of the Group against strategic KPIs. These updates are

conveyed to the Board through regular sustainability

updates as outlined on page 80. CEO, CFO and a

number of AMB members’ remuneration was aligned

with sustainability targets for FY23. This included

embedding the net zero ambition and best practice

environmental management across the business,

delivering against the CO

/RPK targets and driving

higher ESG scores. This is set out in the Directors’

Remuneration Report on page 113.

(b) Management’s role in assessing and

managing climate-related risks and

opportunities

easyJet has a Sustainability Steering Committee

which meets regularly. It comprises several AMB

members including the CFO, the Chief Operating

Officer (COO), the Chief Customer & Marketing

Officer, Group General Counsel, the CEO of

easyJet holidays, Group People Director and the

Group Markets Director (Chair), as well as the

Director of Sustainability and Director of Tax &

Fuel. This committee is responsible for steering our

Sustainability Strategy, driving key sustainability-

related decisions, such as on technology

partnerships and programmes that support our

net zero pathway, delivering against strategic KPIs,

and the consideration and disclosure of climate-

related risks opportunities. This committee is also

updated on the progress of the ISO14001-aligned

Environmental Management System, including the

work of the Fuel Conservation Working Group.

In FY23, we expanded our dedicated Sustainability

team, which works with management and teams

across the Group to develop and coordinate

implementation of the Sustainability Strategy. In

FY23, management accountabilities related to the

delivery of the net zero roadmap were agreed and

formalised in a RACI matrix.

Read more on page 20

STRATEGY

(a) The climate-related risks and opportunities

we have identified over the short, medium and

long term

Risks and opportunities are dynamically reviewed

and developed as part of the corporate risk

management framework, which ensures a unified

and collaborative risk management approach and

best practice across the Group. easyJet defines

the time horizons for climate risk as follows:

Short

0–1 year – aligned with budget

Medium

1–5 years – aligned with corporate strategy

and financial plan

Long

5–30 years – aligned with our commitment

to reach net zero by 2050

The key risks identified by the business using the

risk framework, and subsequently reviewed by the

plc Board, fall into seven broad themes – one of

which is the climate change transition risk, as

outlined in the risk section on page 66.

Since FY20, easyJet has engaged with Risilience

(formerly known as Cambridge Centre for Risk

Studies), an enterprise risk management specialist, to

assess our exposure to climate-related risks and

opportunities under four global average-temperature-

increase scenarios. Risilience created a digital twin of

the Group’s current portfolio and business activities,

assuming no climate actions are undertaken.

TCFD categorisation was then used to define

transition and physical risk definitions and scope,

and each risk was modelled independently. The

analysis covered physical and transition risks that

easyJet could be exposed to in the short, medium

and long term. The focus of the analysis was on the

five-year horizon to identify which risks easyJet

could be exposed to in the short and medium term,

aligned with easyJet’s budget and corporate

strategy timeframes. These risks were extrapolated

and assessed qualitatively to determine their

long-term impact.

The assessment was made using workshops and

interviews with key internal stakeholders regarding the

potential financial risks to our business operations

associated with physical and transition risks. Risilience

then undertook scenario modelling of each climate

risk against easyJet’s current commercial and physical

footprint. This included the potential financial impacts

of transition risks such as changing climate and

carbon-related taxes and regulatory changes on a

country level as well as physical risks.

easyJet has assessed the financial impact of

climate change transition risks and physical risks

against the organisation’s threshold for what

constitutes a risk of ‘major concern’ i.e. substantive

financial or strategic level of impact and ‘above risk

tolerance’. This metric is defined by the overall

Group materiality principle of 1% of total assets

equating to a threshold of £99 million.

This assessment has been reviewed and updated

in FY23 to reflect the evolving landscape.

Transition risks

easyJet has identified six transition risk areas:

> Compliance costs: Financial impact of

coordinated regulatory action to increase the

costs of emitting GHGs.

> Legal: Legislation and litigation to ensure that

companies take sufficient action on GHG

reduction.

> Technology: Transition to low-carbon emissions

technology and products drives increased total

operating costs, impairment of existing assets

and delivery risk.

> Consumer sentiment: Consumer preferences

shift at scale to lower emissions alternatives

resulting in demand suppression.

> Investor/market sentiment: Investors retreat

from carbon-intensive industries, resulting in

increasing challenges to attract/retain

investment and/or financing opportunities.

> Reputation: Impact of greenwashing claims and

climate activism towards organisations and

industries that are seen as being slow to

transition towards a low-carbon economy

adversely impacting reputation, brand and

ultimately demand.

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We have identified specific risks within these

transition risk areas. These include:

Compliance costs: carbon pricing

(short to medium term)

Future policy measures and regulation, to tackle

the impact of aviation on climate change such as

escalating costs of carbon emissions, introduction

of non-CO

emissions taxes and the phasing out of

Emissions Trading System (ETS) free allowances

for the aviation sector, will add significant costs for

European airlines. easyJet has exposure to three

ETS schemes – UK, EU and Switzerland – which

included 79% of our flying carbon emissions in

FY23. While the impact of existing carbon pricing

mechanisms are modelled in easyJet’s financial

plans, the cost is subject to market volatility. Policy

change could result in a risk in the case of

escalating costs, or conversely an opportunity

where the actual costs are lower than expected.

Technology: Sustainable Aviation Fuel mandates

(medium to long term)

Sustainable Aviation Fuel (SAF) mandates in the

UK and EU will require fuel suppliers to provide

kerosene with a specified blend of SAF at airports

in that country or region. Airlines lifting fuel in

these countries will therefore be subject to higher

total fuel cost in FY22. easyJet signed a SAF

supply agreement with Q8, one of our key fuel

suppliers, creating a contractual obligation on Q8

to supply volumes of SAF that at least meet

minimum mandate requirements until FY27 in

order to secure certainty of supply.

We also have flexibility in our SAF agreement to

procure up to 10% more than mandated volumes

in order to manage the risk that other levers

contributing to our carbon intensity reduction

targets fall short.

As with carbon pricing mechanisms, the risk

and opportunity lies in SAF volatility.

Technology: New technology transition (long term)

Capex and operational costs associated with the

introduction of new technology such as next-

generation aircraft, alternative fuels and carbon

removals, and potential depreciation impacts on

older assets.

Physical risks

The Risilience analysis highlighted the acute and

chronic physical risks that could impact our business.

These relate to extreme weather events as well as

long-term environmental changes. The physical risks

were assessed according to the forecast changes in

environmental conditions in the different geographies

in which we operate and include the following:

> Operational disruption: Due to extreme weather

events in the short, medium and long term.

> Market disruption: Changing demand patterns

due to climate change in the long term.

Due to the nature of our business, easyJet could be

exposed to both on-the-ground impacts (such as

heavy rainfall and flooding affecting airport

infrastructure) and aerial impacts (such as more

severe storms, extreme wind or hailstorms). The

geographic spread of physical risk types varies

depending on the specific location – for instance,

coastal flooding was modelled as being more

pronounced in low-lying areas of North Western

Europe such as the Netherlands, whereas heatwave

risk was higher in inland regions of Spain, Portugal

and France. As an airline operator we have some

flexibility to adapt network and operations to

respond to changing geographic risk.

Risks summary

Risilience quantified easyJet’s climate change risks

using a five-year Enterprise Value at Risk (5yrEV@

Risk) metric for the period FY24–28, which shows

how the risks would impact discounted cash flows

over five years according to different scenarios,

aligned with the timeframe for easyJet’s budget,

corporate strategy and financial planning process.

The long-term risk levels have been determined

based on the quantified short to medium-term

risks and the long-term impact and likelihood, as

outlined in easyJet’s Corporate Risk Register.

The following table provides an indication of the

risk relative to present day, based on the Paris

Agreement scenario in the absence of actions

taken by easyJet to manage our climate change

transition. This scenario was selected as the

baseline as it is consistent with the SBTi aviation

sectoral decarbonisation pathway, which is aligned

to a well-below 2

C temperature scenario.

Risk

Short term

(0–1 year)

Medium term

(1–5 years)

Long term

(5–30 years)

Compliance costs

Legal

Technology

Consumer sentiment

Investor/market sentiment

Reputation

Physical

Low: <£99 million Medium: £99–200 million High: >£200 million

Medium and long-term risks have been assessed on 5yrEV@Risk and categorised as low: <£99 million,

medium £99–200 million, high >£200m due to £99 million being the Group materiality threshold.

Short-term risks are categorised as low as they are accounted for in easyJet’s financial plan. In FY23,

Risilience have upgraded their models to carry out calculations on a more granular level and with

updated macro assumptions that are based on published research and data. Technology and consumer

sentiment risks have changed from medium in FY22 to high in FY23 due to the change in definition and

upgrades to the model as opposed to a change in the underlying risk.

Opportunities summary

The key opportunities easyJet has identified are outlined below. The size of the bubble indicates the

relative impact at each time horizon.

Opportunity

Short term

(0–1 year)

Medium term

(1 – 5 years)

Long term

(5 –30 yea rs)

Fleet renewal: the use of more efficient Airbus

NEO aircraft, which reduce our fuel burn, carbon

emissions and related costs – easyJet has 158 A320neo

family aircraft on firm order valued at $18 billion at list

prices, and a proposed order for a further 157 firm orders

and 100 options

Optimising flight operations: initiatives to minimise fuel

burn, carbon emissions and related costs

Supporting development of zero carbon emission flight:

collaborations with industry partners, including Rolls-

Royce, Airbus, GKN and Cranfield Aerospace Solutions,

will be a key long-term driver of industry decarbonisation

Shifting consumer preferences: opportunity for easyJet

to build brand preference and loyalty as consumer

preferences shift towards organisations that are

committed to tackling climate change

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(b) The impact of climate-related risks and

opportunities on our businesses, strategy

and financial planning

Climate-related risks and opportunities are integrated

into the organisation’s strategic and financial plans

and have a material influence on major business

decisions. These include our fleet strategy centred

on fleet portfolio decisions and the purchase of

next-generation aircraft, an increased focus on

fuel-saving initiatives to refine our operation, entering

into partnerships with entities at the vanguard of

decarbonisation technologies and investigations into

transitioning from fossil fuels to electric power for

airport ground operations. This is further highlighted

amongst the nine principal risks which fall within the

seven principal risk themes, as outlined on page 66.

Costs associated with carbon, i.e. costs related to

SAF and to ETS, are incorporated into our five-year

financial plan and inform key longer-term decisions

such as fleet planning.

Transition plan – net zero roadmap

In FY22, we set an interim science-based target of

35% reduction in GHG emissions intensity by 2035

– we were the first low-cost carrier in Europe to have

our target validated by the Science Based Targets

initiative (SBTi). easyJet’s net zero roadmap provides

the framework with which to achieve these targets.

The pathway defines the levers with which we intend

to decarbonise our airline operations, along with

how, when and to what extent we need to use them,

materially affecting business decisions over the

short, medium and long term. In FY23, easyJet won

a number of awards for our net zero roadmap,

including the Best Net Zero Strategy of the Year at

the inaugural UK Green Business Awards in London.

The net zero roadmap is aligned to the SBTi

aviation sectoral decarbonisation pathway, which

is aligned to the Paris Agreement scenario (well

below 2°C). However, in the long term, easyJet’s

pathway drives emissions intensity reductions that

exceed the requirements of the SBTi pathway.

In the short to medium term, our focus will be on

maximising efficiency and using SAF in line with

mandated requirements. These initiatives will

continue into the long term. This will involve the

following:

> Fleet renewal with Airbus NEO aircraft, which

are at least 15% more efficient than the aircraft

they replace. We currently have a firm order for

158 NEO aircraft to be delivered up to FY29 and

a proposed order for a further 157 firm orders

and 100 options to be delivered by FY34.

> Airspace modernisation, which will lead to more

direct flight routings. easyJet is actively

contributing to these efforts via the IRIS

programme with Inmarsat, Airbus and the

European Space Agency, and on Project HERON

as part of the Single European Sky programme.

> A suite of operational efficiency initiatives that

minimise fuel burn, including Descent Profile

Optimisation (DPO), which has been installed

on 332 of our aircraft.

> Contractually committed SAF volumes with our

fuel supply partners to ensure security of supply

of SAF.

In the long term, zero carbon emission aircraft are the

cornerstone of our pathway. Based on today’s

science, our focus is on hydrogen-powered aircraft as

we believe it shows the most potential for a short-haul

airline like easyJet. Hydrogen has no carbon emissions,

provided it is green hydrogen produced with

renewable electricity, and has the potential to reduce

non-CO

emissions from flying. Please refer to page

20 for more detail on the net zero roadmap.

easyJet is driving the development of hydrogen

aircraft through numerous investments and

partnerships:

> easyJet and Rolls-Royce partnership to pioneer

the development of hydrogen combustion

engine technology has already delivered the

world’s first run of a modern aero engine on

hydrogen, as well as two UK and EU funded

research programmes.

> easyJet continues to collaborate on Airbus’

ZEROe programme dedicated to developing

hydrogen-powered zero emissions aircraft.

> easyJet led the formation of the Hydrogen in

Aviation alliance, an alliance of major players

across aviation, to accelerate the delivery of

zero carbon emissions aviation.

> As a founding member of Hydrogen South

West, we are developing hydrogen ecosystems

to support the introduction of aircraft, in close

collaboration with Bristol Airport.

Carbon removal technology will also play a critical

role in our roadmap, both in supporting feedstock

as a component of power-to-liquid SAF and as a

mechanism to address residual emissions. In

October 2023, easyJet was the first airline in the

world to sign a contract for Direct Air Carbon

Capture and Storage (DACCS), via the Airbus

Carbon Capture Offer.

The net zero roadmap provides the framework

with which to mitigate against five of the six key

transition risks – compliance, legal, consumer

sentiment, investor/markets sentiment and

reputation. The key remaining risk is technology

– delivery of the roadmap is dependent on the

scaling-up of SAF production and the

development of nascent technologies such as zero

carbon emission aircraft, and there is a risk of a

potential increase in costs associated with

transition to these technologies and/or with

potential adjustment to net zero roadmap delivery

levers necessary.

Beyond carbon dioxide, non-CO

effects such as

contrail cirrus and nitrous oxides (NOx) contribute

to aviation’s impact on global warming. easyJet

has joined Project CICONIA, part of the EU Single

European Sky programme, to explore operational

methods to minimise the formation of warming

contrails and contribute to the development of

mitigation strategies.

FY23 performance

In FY23, easyJet delivered strong progress against

our interim SBTi target with a 5% reduction in GHG

Overview of scenario analysis

Scenario Current policy Stated policy Paris Agreement

Paris Ambition

Temperature alignment 3°C 2.5°C Well below

2°C

1.5°C

Target global emissions reduction -50%

by 2100

-75%

by 2100

Net zero

by 2050

Net zero

by 2050

Representative concentration pathway RCP 7.0 RCP 4.5 RCP 2.6 RPC 2.6

1) easyJet works in partnership with Risilience to evaluate a range of climate change-related risks across a range of

scenarios, outlined further on page 68.

2) The Paris Agreement of well below 2°C was selected as the baseline scenario as it is aligned with the SBTi aviation

sectoral decarbonisation pathway. The analysis varied input assumptions across the transition risks in line with these

scenarios. As an example, the Paris Agreement scenario assumes a 56% increase in consumers adopting sustainable

alternative products by 2030, compared to 58% under the Paris Ambition and 42% under ‘stated policy’. 5yrEV@Risk

was assessed under these scenarios as described in the Risks summary on page 59. These scenarios incorporate

socio-economic projections from the Shared Socioeconomic Pathways (SSPs).

emissions intensity versus a FY19 baseline, and are

on track to meet our interim science-based target.

This was driven by fleet renewal, with a further 10

NEO aircraft joining the fleet, and the strong

performance of operational efficiency initiatives.

Our net zero transition plan is also aligned with the

SBTi Aviation Sectoral Decarbonisation Approach.

consideration different climate-related

scenarios, including a 2°C or lower scenario.

easyJet’s net zero pathway is aligned to the SBTi

aviation sectoral decarbonisation pathway, which

is aligned to the Paris Agreement scenario (well

below 2°C). The sensitivity of the pathway and the

ability to meet our targets in the absence of

different levers has been assessed to ensure there

is no over-dependence on any single lever.

There is currently no formal aviation sectoral SBTi

pathway aligned to the Paris Ambition (1.5°C),

although SBTi has released an interim pathway

that is yet to go through consultation. easyJet

aims to reach net zero by 2050 by reducing

emissions intensity by 78% and addressing residual

emissions via carbon dioxide removal technology.

This is a significantly better reduction than the 57%

threshold defined for easyJet by the well below

2°C SBTi pathway. This gives easyJet headroom

and therefore resilience in respect of our climate

change risk and net zero strategy.

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RISK MANAGEMENT

(a) Our processes for identifying and assessing

climate-related risks and opportunities

easyJet works in partnership with Risilience to

evaluate a range of climate change-related risks

across a range of scenarios as described on page

55. The quantified risks are then assessed against

the organisation’s threshold for what constitutes a

risk of ‘major concern’, e.g. substantive financial or

strategic level of impact and ‘above risk tolerance’.

This metric is defined by the overall Group

materiality principle of 1% of total assets equating

to a threshold of £99 million.

In parallel, we leverage our internal and external

network to understand and critically evaluate

transition risks and opportunities related to

compliance, consumer sentiment, market

sentiment, technology, legal and reputation that

are relevant to the Group. Group Finance, Legal,

Investor Relations and Marketing teams support

the identification and qualitative and quantitative

assessment of specific risks and opportunities,

feeding into Risilience’s analysis, and into strategy

and financial planning for the Group.

Risilience conducted workshops in FY22 focused

on climate-related risks identified to have a

potentially substantial financial impact. The

workshops involved colleagues from across the

business and identified the key functional level

risks within each corporate level risk category.

For full details of the specific risks identified,

see Strategy section (a) on page 54.

The impact and likelihood inputs were then

calibrated in order to reach an aligned and

consistent view of each risk. These risks are

reviewed annually and updated if required.

(b) Our processes for managing climate-related

risks and opportunities

Following the outputs of internal stakeholders,

the Risilience study and external networks, risk

workshops were conducted to determine the

appropriate ownership and management of these

risks. This process confirmed climate change

transition is a principal risk, see page 66 of our Risk

section for further detail. Mitigations and controls

for these risks were developed by the named risk

owners including those outlined on page 66 and

are documented in the Climate Change Transition

Risk Register, overall ownership of which sits with

the CFO. Governance for these risks and

mitigations are regularly reviewed through

easyJet’s Sustainability Steering Committee.

Ownership of risks are outlined below.

Risk Risk owner

Compliance costs CFO

Legal Group General Counsel

Technology CFO

Consumer sentiment Chief Customer &

Marketing Officer

Investor/market

sentiment

CFO

Reputation Group Markets Director

and managing climate-related risks are

incorporated into the business overall risk

management

As described in the risk management section

(b) above, climate change transition risks are

incorporated into the corporate risk framework

and register. For more detail on the overall risk

management of the business, see the Risk section,

pages 59 to 66.

Mitigation options that are identified during the

above process have been incorporated into

easyJet’s net zero pathway, which is reviewed

on an annual basis and feeds into the corporate

strategy and financial planning process and

principal risks and uncertainties, see pages

61 to 66.

METRICS AND TARGETS

(a) The metrics we use to assess the climate-

related risks and opportunities in line with our

strategy and risk management process

easyJet assesses financial impact in the form of

5yEV@Risk. These figures are then assessed

against the materiality threshold, which is defined

by the Company as 1% of total assets, i.e. a

threshold of £99 million in FY23. Risks and

mitigation options identified through these metrics

have been incorporated into easyJet’s climate

change transition plan and continue to inform our

financial and strategic planning.

(b) Our disclosure of Scope 1, Scope 2 and

Scope 3 GHG and the related risks

easyJet has disclosed its full value chain emissions

in this Annual Report. Read our comprehensive

GHG and energy performance table, including

Scope 1, 2 and 3 emissions on page 45, where you

can find the breakdown by geography and the

methodology used. See page 45 for a link to the

detailed independent assurance statement.

risks and opportunities and performance against

targets

In FY22, easyJet joined the Race to Zero and in

doing so we committed to setting an interim

science-based target on GHG intensity for 2035 as

well as to reach net zero carbon emissions by

2050, aligning with the aviation sector criteria and

recommendations of the SBTi.

As our interim target, easyJet has committed to

reducing well-to-wake GHG emissions related to jet

fuel by 35% per Revenue Tonne Kilometre (RTK) by

FY35 from a FY19 base year

1 2

, which has been

approved by the SBTi.

easyJet’s net zero roadmap, outlined on page 20,

provides the framework with which we intend to

meet our targets in 2035 and beyond on our

journey to net zero in 2050.

For details of the CEO and CFO sustainability-

related targets, see the Remuneration Report on

page 115.

1) The target boundary includes biogenic emissions and

removals from bioenergy feedstocks.

2) Non-CO

e effects which may also contribute to aviation

induced warming are not included in this target. easyJet

commits to report publicly on its collaboration with

stakeholders to improve understanding of opportunities

to mitigate the non-CO

e impacts of aviation annually

over its target timeframe.

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SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB) INDEX

SASB Standards identify the subset of ESG issues most relevant to financial performance and enterprise value for 77 industries. Below we report on the metrics for the Airlines standard.

TABLE 1. SUSTAINABILITY DISCLOSURE TOPICS AND ACCOUNTING METRICS

Topic Accounting metric Category Unit of measure Code Disclosure

Greenhouse

gas emissions

Gross global Scope 1 emissions Quantitative Metric tonnes (t) CO

e TR-AL-110a.1 Disclosed on page 45 of Annual Report

Discussion of long-term and short-term strategy or plan to manage

Scope 1 emissions, emissions reduction targets, and an analysis of

performance against those targets

n/a T R - A L-1 1 0 a . 3 Covered in the Annual Report, (primarily pages 43

to 46)

(1) Total fuel consumed Quantitative Gigajoules (GJ) TR -A L- 1 1 0 a . 3 103,880,085

(2) Percentage alternative Percentage (%) 0.020%

(3) Percentage sustainable 0.020%

Labour practices

Percentage of active workforce covered under collective bargaining

agreements

Quantitative Percentage (%) T R - A L-3 1 0 a .1 85% – disclosed in ESG fact sheet

(1) Number of work stoppages and Quantitative Number, days TR-AL-310a.2 Not disclosed

(2) Total days idle

Competitive

behaviour

Total amount of monetary losses as a result of legal proceedings

associated with anticompetitive behaviour regulations

Discussion and

analysis

n/a T R - A L- 5 4 0 a .1 The Company has not incurred any monetary

losses as a result of legal proceedings associated

with anti-competitive behaviour regulations

Accident and

safety management

Description of implementation and outcomes of a safety

management system

Discussion and

analysis

n/a T R - A L- 5 4 0 a .1 Disclosed in Safety, Quality & Governance ESG

fact sheet. Also discussed in Annual Report risk

section pages 59 to 66

Number of aviation accidents Quantitative Number TR-AL-540a.2 Zero

Number of governmental enforcement actions

of aviation safety regulations

Quantitative Number T R - A L-5 4 0 a . 3 Zero

TABLE 2. ACTIVITY METRICS

Activity metric Category Unit of measure Code Disclosure

Available Seat Kilometres (ASK)

Quantitative ASK TR-AL-000.A Disclosed on page 34 of Annual Report

Passenger load factor

Quantitative Rate TR-AL-000.B Disclosed on page 34 of Annual Report

Revenue Passenger Kilometres (RPK)

Quantitative RPK TR-AL-000.C Disclosed on page 34 of Annual Report

Revenue Tonne Kilometres (RTK)

Quantitative RPK TR-AL-000.D Disclosed on page 45 of Annual Report

Number of departures Quantitative Number TR-AL-000.E Disclosed on page 34 of Annual Report

Average age of fleet Quantitative Years TR-AL-000.F 9.9 years

1) Note to TR-AL-310a.2 – Disclosure shall include a description of the reason for each work stoppage, impact on operations and any corrective actions taken.

2) Note to TR-AL-520a.1 – The entity shall briefly describe the nature, context and any corrective actions taken as a result of the monetary losses.

3) Note to TR-AL-000.A – Available Seat Kilometres (ASK) is defined as the maximum potential cumulative kilometres travelled by passengers (i.e. kilometres travelled by occupied and unoccupied seats).

4) Note to TR-AL-000.B – Load factor is a measure of capacity utilisation and is calculated as passenger kilometres travelled, divided by ASK.

5) Note to TR-AL-000.C – Revenue Passenger Kilometres (RPK) is defined as the cumulative total kilometres travelled by revenue passengers. A revenue passenger is a passenger for whose transportation an air carrier receives commercial remuneration.

6) Note to TR-AL-000.D – Revenue Tonne Kilometres (RTK) is defined as one metric tonne of revenue traffic transported one kilometre. RTK is computed by multiplying the aircraft kilometres flown on each flight stage by the number of metric tonnes

of revenue traffic carried on that flight stage (e.g. passengers, baggage, freight and mail).

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RISK MANAGEMENT

EFFECTIVE

RISK

MANAGEMENT

functional management of risks.

We continue to develop our

corporate risk framework to

ensure that risks, including

emerging risks, are identified,

assessed, managed and

articulated. Emerging risks are

captured from a variety of

sources and are updated onto

our central Risk Radar. This is

shared in each AMB and Audit

Committee meeting attended.

The Risk & Assurance team

works with the functions to

ensure that risk information

remains relevant, control

deficiencies or gaps are identified

and improvement actions are

implemented. During FY23, the

Corporate Risk team has further

developed the corporate risk

framework. The principal risks

and risk themes have been

updated in line with the strategy,

the enhanced risk appetite

process was used to update risk

appetite for FY24, the risk radar

process is being further

developed and a Risk Platform

has been procured and is being

rolled out. All functional risks

have been scored on the same

basis using the same taxonomy.

The Corporate Risk, Compliance

and Internal Audit teams have

updated the assurance map to

identify key controls to manage

our principal risks and

understand the assurance over

these controls and have validated

a number of these controls.

Following a robust review of the

2022 principal risks, a refresh of

the principal risks took place

during the second half of the

year. We recategorised where

our sub risks were positioned

against the main principal risk.

in place for identifying and

assessing the Group’s emerging

and principal risks.

The Board, with the assistance

of the Audit Committee, has

carried out a robust assessment

of the principal and emerging

risks facing the Group and how

those risks affect the prospects

of the Group.

The Risk & Assurance team is

responsible for creating,

implementing and delivering the

corporate risk framework and

reporting the principal and

emerging risks to the Board.

Each function across easyJet is

responsible for understanding

and managing its own risks and

considering the impact on all

stakeholders. To ensure that risks

are managed within the

framework, the Risk & Assurance

team maintains a programme of

risk monitoring with each

function and promotes cross-

OUR CORPORATE RISK FRAMEWORK

The Board approves the strategy

for easyJet, including strategic

initiatives and objectives, and

ensures suitable oversight and

governance through several

management methods. This

includes monitoring and reporting,

strategic reviews, oversight

committees and deep dives into

specific risk areas. The Board is

ultimately responsible for

determining the nature and extent

of the principal risks it is willing to

take to achieve its strategic

objectives, setting its risk appetite,

and maintaining the Group’s

systems of internal control and

risk management. The Audit

Committee and the Board are

accountable for reviewing and

assessing the risk management

processes. The Risk & Assurance

team, which reports jointly to the

Chair of the Audit Committee and

Chief Financial Officer (CFO),

ensures that robust processes are

RISK THEMES

Nine corporate risks fall into seven corporate risk themes, which have been updated

to ensure alignment to the corporate strategy as follows:

SAFETY, SECURITY

AND OPERATIONS

easyJet’s number one priority is the safety and security of its

customers, colleagues and contractors, demonstrated by our value

of ‘always with safety at our heart’. The delivery of a safe and

secure operation also supports easyJet’s strategy to ‘deliver ease

and reliability’ to meet the needs and expectations of our

customers. This is critical to ‘building Europe’s best network’.

OUR PEOPLE

Having the right people is a key part of our value to be ‘always

warm and welcoming’ and ‘living the Orange Spirit’. We aim to

create an inclusive, diverse and energised environment that

attracts the right people and inspires everyone to learn and grow.

MACRO-ECONOMIC

AND GEOPOLITICAL

Our values include to ‘always challenge costs’. The airline industry

can be sensitive to macro-economic and geopolitical conditions

which could affect our financial performance. Risks include supply/

demand imbalance, general economic trends, as well as the impact

of changes in fuel cost, foreign exchange rates and counterparty

performance.

TECHNOLOGY

easyJet’s strategy to ‘deliver ease and reliability’ includes

developing new technologies to enhance experiences and

operational performance. The ever-increasing sophistication of

serious organised crime groups, terrorists, nation states and even

lone parties means that, despite all the mitigation detailed, easyJet

will inevitably retain an element of vulnerability regarding the

availability, confidentiality and integrity of its data and information.

Digital safety is treated as seriously as physical safety under our

value ‘always with safety at our heart’.

LEGISLATIVE/REGULATORY

LANDSCAPE

Our value of ‘making a positive difference’ in a heavily regulated

industry includes keeping well informed and adapting (as required)

to any legislative or regulatory changes across the jurisdictions in

which we operate.

ENVIRONMENTAL

SUSTAINABILITY

The impacts of climate change transition risk on our business and

operations, regulation and taxation, and changing consumer,

colleague and shareholder expectations. easyJet’s environmental

sustainability commitment is to reduce our impact today, and to

pioneer a sustainable future for travel.

ASSET

PERFORMANCE

Supporting easyJet’s strategic priorities of ‘transforming our revenue

capability’ and ‘delivering ease and reliability’ we make the best use

of our fleet capabilities and our capacity/slots in the right airports at

the right prices, whilst working with our supply chain to enhance

value and deliver our priority of ‘driving our low-cost model’.

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easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

CASE STUDY

Ensuring we

have the

talent we

need

Organisations across many different sectors were

competing for talent in the market, as a period of staff

reductions changed to a period of high recruitment.

Onboarding processes became more difficult. Our

regulators dictate the standards of background checks

that we must achieve for new starters, and the

pandemic coincided with the introduction of new

enhanced background checks. Our new starters had

more complex employment backgrounds as a result of

the pandemic, often with periods of employment which

we were unable to verify due to the closure of many

businesses. These external factors resulted in significant

processing time challenges, which meant that many of

our new starters were unable to work following the

completion of training. We looked to compress our

onboarding times to support new starter engagement,

but our third-party vetting partners struggled to keep

pace with the evolving and growing intake plan,

meaning that onboarding for many new starters took

significantly longer than planned.

We made significant changes to enhance the planning

and onboarding of new colleagues. We compressed the

timeline and started the recruitment process (and

hence onboarding) three months earlier to proactively

access the potential pool of candidates, support

engagement and deliver to plan. We brought our

outsourced vetting process in-house, which delivered

an improved candidate experience, a quicker

turnaround time and could meet the changing needs of

the business. We have also launched a pilot cadet

programme, ensuring we have resilience in place for our

future pilot needs through a partnership with CAE over

the next five years. This new partnership will see 200

cadets join easyJet on our multi-pilot licence

programme each year and will support 1,000 new pilots

into the industry. This is in addition to our direct-entry

pilot recruitment.

Our people is one of our risk themes, and talent

acquisition and retention a principal risk. Following the

pandemic, the airline industry suffered a reduction in

staffing levels, due to a number of redundancies and

staff leaving because of uncertainty in the industry.

This had an impact on our ability to operate at full

capacity during the final months of the pandemic.

As easyJet and the wider aviation industry began to

recover from the pandemic, there was a time lag in

recruiting, onboarding and training staff to meet the

pent-up demand for travel.

At easyJet, people are our greatest asset.

Without them we cannot deliver and

operate safe and timely flights or provide

the brilliant customer service we are known

for. We are speeding up our recruitment

procedures to make sure we encourage the

best talent to easyJet.

The following title changes were

made to the principal risks:

> Safety, security and

operations changed to

Significant operational

disruption

> Asset efficiency and

effectiveness changed to

Network and primary airport

> Legislative and regulatory

landscape changed to Breach

of regulatory requirements

> People changed to Talent

acquisition and retention

> Environment and sustainability

changed to Climate change

transition risk

> Technology and digital safety

changed to Significant safety

or security event

> Macro-economic and

geopolitical changed to

Macro-economic conditions

Two new risks have been

introduced:

> Non delivery of strategic

initiatives

> Significant digital safety event

Two risks have been removed:

> Pandemic

> Brand licence

There are a variety of potential

impacts for each risk and

subrisk, which are documented

in detailed risk registers. These

are consolidated into an overall

impact and likelihood score for

each subrisk and overall risk.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

OUR PRINCIPAL RISKS AT A GLANCE

Risk themes Our strategic priorities

Principal risk

Risk change Risk owner

Breach of regulatory requirements Group General Counsel

Significant safety or security event Chief Operating Officer

Significant digital security event Chief Information Officer

Macro-economic conditions Chief Financial Officer

Network and primary airport risks

Chief Commercial Officer

Non-delivery of strategic initiatives

Significant operational disruption Chief Operating Officer

Talent acquisition and retention risks Group People Director

Climate change transition risks Chief Financial Officer

Read more on pages 62 to 66

This heat map shows the

relative position of our

principal risks at a residual

risk level. We continue to

monitor risks and develop

action plans where

necessary to keep risks in

line with our risk appetite.

RISK HEAT MAP

Impact

Likelihood

RISK THEMES OUR STRATEGIC PRIORITIES

Asset performance

Legislative/regulatory landscape

Our people

Technology

Environmental sustainability

Macro-economic and geopolitical

Safety, security and operations

Delivering ease and reliability

Transforming our revenue capability

Driving our low-cost model

Building Europe’s best network

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

BREACH OF REGULATORY REQUIREMENTS

SIGNIFICANT SAFETY OR SECURITY EVENT

MITIGATIONS

> Policies, procedures and mandatory training

programmes:

– In-house legal experts and advisers to

identify and respond to changes in

legislation.

– External legal experts and advisers to

identify and respond to changes in

legislation.

– Influencing relevant future and existing

policy, including by working with relevant

industry bodies.

– Adapting existing processes for new

legislation/regulation.

> Advice from third-party experts to ensure

adherence to all disclosure requirements:

– External auditors provide regulatory updates

– Technical accounting team assesses any

impact on easyJet’s Group accounts from

changes in IFRS requirements.

– Subscription to third-party technical

accounting platform (currently

Viewpoint)tokeep abreast of changing

reporting requirements.

> easyJet holidays recruitment policy to include

hire of lawyer/paralegal with expertise in each

new jurisdiction, for example Swiss and any

additional new markets:

– Existing in-house team receives regular

updates on cross-jurisdictional legislation.

– Most expansion destinations are within the EU.

– Panel law firms have multi-jurisdictional

reach.

MITIGATIONS

> Cross-functional safety action groups identify,

evaluate and control safety-related risks:

– easyJet Safety Board reviews safety,

security and compliance performance

across all Air Operator Certificates (AOC). It

is chaired by the CEO, attended by AOC

accountable managers and periodically by

AOC regulators.

– Local safety review boards, including at AOC

level, are open for the local regulator to

attend.

– Published Safety Policy promotes incident

reporting process and supports safety

culture.

– easyJet Safety Management System using

leading software systems to: report

incidents and events; identify and mitigate

hazards and threats; collect and analyse

safety data (identifying potential areas of

risk); capture learnings from easyJet and

industry events/incidents; and embed into

future risk mitigations.

– Timely, credible and reliable information

upon which to base operational decisions.

– Emergency response process and crisis

management exercises.

– Hull (all risks) and liabilities insurance

(including spares).

– Geopolitical developments across the easyJet

network, reviewed by security-cleared

specialists and reported back to the Board.

– Airport inspection regime to ensure the

security elements effectively managed at

all our airports.

– Continual review and development of safety

management processes.

SUB RISKS

Changing legal and

regulatory landscape

Increasing requirement

for disclosure

Cross-jurisdictional legislation

Corporate Social

Responsibility Directive

No sub risks specified for this risk

POTENTIAL IMPACTS

> Sustained adverse media coverage

> Fines/regulatory sanctions

> Reduction in future revenue

> Operational disruption

> Loss of operating licence

> Significant spike in costs

> Share price movement

> Loss of colleague/customer trust

POTENTIAL IMPACTS

> Sustained adverse media coverage

> Reduction in future revenue

> Fines/regulatory sanctions

> Operational disruption

> Significant spike in costs

> Share price movement

CHANGE IN RISK CHANGE IN RISK

RISK THEME

Legislative/regulatory landscape

RISK THEME

Safety, security and operations

RISK OWNER

Group General Counsel

RISK OWNER

Chief Operating Officer

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

MITIGATIONS

> A data and cyber risk governance structure

exists to regularly review the data and cyber

risk landscape and determine required action

to take place to manage risk effectively:

– Dedicated Digital Safety team provides a

level of assurance over third parties,

proactively monitors threats and responds

to incident.

– Employee education and awareness

programme includes a network of

champions, online training and awareness

campaigns.

– External threat intelligence monitoring.

– Security logging and monitoring.

– Vulnerability scanning and penetration

testing.

– Credit card data is protected through PCI

DSS compliance as a Level 1 Merchant.

– Digital safety is discussed monthly at our

Airline Management Board (AMB), biannually

at Board and biannually at Audit Committee.

Additionally, as part of our governance

processes, the Digital Safety Board meets

regularly to discuss matters related to our

cybersecurity.

> Digital Safety Programme ensures compliance,

data controls and protection. Vulnerability

reduced by establishing documented

workflows, training programmes and

establishing employee guidelines.

SUB RISK

Data loss or compromise

POTENTIAL IMPACTS

> Sustained adverse media coverage

> Reduction in future revenue

> Fines/regulatory sanctions

> Operational disruption

> Significant spike in costs

> Share price movement

CHANGE IN RISK

RISK THEME

Safety, security and operations

RISK OWNER

Group General Counsel

MITIGATIONS

> The Finance Committee oversees the Treasury

Policy and funding activities.

> The Treasury Policy contains strategies for

managing market price risk, counterparty

credit risk and liquidity risk management.

The Board approves the Treasury Policy.

Compliance with the Treasury Policy is

reported on a monthly basis.

> easyJet manages a liquidity buffer to protect

against unforeseen circumstances. This

liquidity buffer is supported by cash and

undrawn facilities.

SUB RISK

Volatility in financial markets

POTENTIAL IMPACTS

> Share price movement

> Significant increase in costs

> Adverse impact to credit rating

CHANGE IN RISK

RISK THEME

Macro-economic and geopolitical

RISK OWNER

Chief Financial Officer

SIGNIFICANT DIGITAL SECURITY EVENT

MACRO-ECONOMIC CONDITIONS

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

MITIGATIONS

> Where easyJet is affected by industrial

action or other service interruption by a key

supplier, resources are deployed to manage

this as effectively as possible:

– Managing aircraft gauge to improve our

ability to grow.

– Engagement with Eurocontrol to understand

expected network constraints.

– Tactical flight planning to mitigate impact of

air traffic management constraints.

> Projecting cancellations for the rest of the

season so we can analyse risk and take

informed decisions when required in order to

reduce the risk of permanently losing slots as a

result of capacity reductions:

– Mitigating actions available, e.g. removal of

seats, wet lease and how pipeline for crew is

increased.

– Continuous contact with operations

department to proactively cancel flights

whilst trying to minimise slot impact to

future seasons with minimum number

possible at highly constrained airports.

Although some slot losses may occur.

– Slot-tracker dashboard created to give

teams managing the portfolio better

visibility of complex requirements. Work is

continuing to enhance the tool and

ultimately to allow us to share timely

updates with other departments so they can

be aware of risks due to planned or actual

changes.

> easyJet reviews its capacity allocation each

across all key markets through the Network

Development Forum (NDF) process and

quarterly AMB network and airports updates.

Focus is on any potential slot regulation

changes and is linked into both EU and UK

processes.

> easyJet has a clear strategy of differentiation

through network design. Mitigating competitor

impact is a key focus of this year’s NDF

process.

SUB RISKS

Airport infrastructure capacity

Loss of slots

Failure to protect core markets

Increased competition

POTENTIAL IMPACTS

> Weakened customer proposition

> Customer welfare and safety incidents,

particularly relating to passengers with

restricted mobility

> Loss of market share

> Inefficient use of crew and aircraft

> Significant increase in costs

> Slot portfolio pressure in coordinated

airports

> Loss of crew engagement

> Shortage of ground handling staff (due to

shortage of available recruits in the UK)

could lead to delayed performance of the

schedule, leading to impact on crew hours

and slot compliance

> Shortage of airport staff (people with

reduced mobility and security) risks poor

passenger-handling experience

CHANGE IN RISK

RISK THEME

Asset performance

RISK OWNER

Chief Operating Officer

MITIGATIONS

> Complex, large-scale programmes have been

initiated and prioritised through the Enterprise

Project Management Office.

> The Enterprise Project Management Office is

in place to oversee delivery of projects and

programmes, ensuring dependencies are

managed across the portfolio.

> A project management framework, which

sets out approval processes, governance

requirements and key ongoing processes and

controls, is followed by all projects and

programmes, and reviews are undertaken to

ensure continuous improvement in this approach.

> Each strategic initiative has an executive

sponsor, a Leadership 50 owner and its own

steering group, which provides oversight and

challenge to the project, monitors progress

against programme objectives (including

budget, benefit realisation and appropriate

resource) and ensures that decisions are

made at the appropriate level.

> Key strategic initiatives are managed by

dedicated programme management resource

with the right skills and behaviours,

complemented by subject matter specialist

resource where appropriate.

> The executive sponsor provides routine

updates to the AMB and can use this as an

escalation channel for any issue resolution.

> The Board also receives updates on key

strategic initiatives including any risks or issues

to achieving the key milestones that enable

the achievement of the five-year plan.

> Onboarding of Accenture as the systems

integrator to help orchestrate the largest and

most complex programmes.

> Fortnightly updates on projects to the AMB

with ownership residing with the Chief

Customer & Marketing Officer, with a

more agile approach to deliver faster.

POTENTIAL IMPACTS

> Business benefits not realised

> Financial underperformance

> Inefficient use of resources

CHANGE IN RISK

RISK THEME

Asset performance

Technology

Macro-economic and geopolitical

RISK OWNER

Chief Commercial Officer

NON-DELIVERY OF STRATEGIC INITIATIVES

NETWORK AND PRIMARY AIRPORT RISKS

No sub risks specified for this risk

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

MITIGATIONS

> Maintaining operational resilience through

– Appropriate resilience into the flying

schedule.

– Aircraft and crew standby.

– Reporting on the day of operations, including

customer communication.

– Airport performance and strategic supply

chain.

– Air traffic control system lobbying and flight

planning enhancements.

– Use of data across the operation to predict

and manage events and aid decision support.

– Liquidity buffer to better manage the impact

of downturns in business or temporary

curtailment of activities.

– Significant focus on risk mitigation of, and

preparedness for, a destructive cyberattack.

– Business interruption insurance which

provides some cover for very significant

shock events such as extreme weather, air

traffic management issues and loss of access

to key airports.

> The four key areas of business resilience (IT and

processes, people, premises and suppliers) all

form part of easyJet’s functional business and

airport business continuity plans:

– Adoption of cloud and externally hosted

systems, in addition to easyJet’s two data

centres.

– 24/7 Incident Management Teams.

– Time-critical staff identified through Business

Impact Assessments and Business Continuity

Plans (BCPs), with regular testing.

– Procurement requires relevant third parties to

have own BCPs/Disaster Recovery plans.

– Close working relationships with key

stakeholders, including but not limited to

airport authorities and slot coordinators,

lobbying where appropriate.

> We have established appropriate crew numbers

for the schedule that has been planned to

operate in addition to improving levels of crew

resilience. Summer 2023 recruitment was

delivered successfully and the summer 2024

recruitment campaign is underway with the first

candidates joining before the end of the

calendar year. The crew establishment outlook

for the peak summer flying remains on track to

deliver peak crew volumes in all ranks. Cancelled

flights due to non-availability of crew decreased

significantly in summer 2023 compared to

summer 2022.

> Over 10,000 A320 family aircraft operating

worldwide, with proven track record for safety

and reliability:

– A320neo has a different engine type.

– Aircraft continuous improvement to address

learnings during operation and regulatory-

imposed airworthiness directives.

– Full visibility of Airbus delivery schedule for

new aircraft, with appropriate mitigation.

plans e.g. short-term wet-lease arrangements.

– Rigorous established aircraft maintenance

programme. Schedules approved by relevant

regulatory body.

– Fleet exit strategy options. Second-hand

market. Sale and leaseback.

– Firm order book agreed with Airbus and CFM,

guarantees inventory up to FY29.

– Continuously replace older aircraft and avoid

a prolonged service life for aircraft in

easyJet’s fleet fluctuations.

– Pandemic Lessons Learned review identified

best practice and opportunities for

improvement.

> Business Continuity team/Integrated Control

Centre Planning for disruption:

– A Business Impact Analysis and Business

Continuity Plan is in place for all functions

across the business in order to manage initial

disruption and post-crisis loss of premises,

loss of people, loss of systems, loss of

supplier and our key business critical

resources.

> Union engagement with regular meetings

to engage discussions before any formal

escalations:

– Clear mandate processes and industrial

relations steering committee. We have a clear

industrial relations plan, mandating process

and governance in place to oversee all

negotiations and manage escalations. This

involves AMB leads and budget holders, so

that decisions can be made in a timely

manner.

> Continued improvements to IT environment,

e.g. new data platform further leveraging cloud

hosting and capabilities. Dedicated Digital

Safety team and Digital Safety Programme.

Documented workflows, training and

establishing employee guidelines:

– Monitoring and alerting of availability of

critical technologies and their inter-

dependencies.

– Security logging and monitoring/vulnerability

scanning and penetration testing.

– Non-Damage Business Interruption insurance

in place to limit financial impact of

operational disruption.

– IT Change Management process to ensure

changes to critical IT systems are managed

in a controlled manner.

– Supplier Management process for critical IT

suppliers.

– Critical technologies are either cloud-hosted,

hosted across two data centres or at third-

party provider locations with necessary

failover protocols in place.

– IT Major Incident Management team is in

place to respond rapidly to any unforeseen

critical technology incidents which is aligned

to the wider easyJet Incident and Crisis

Management framework.

– As an Operator of Essential Services under

the Network and Information Systems

regulation in the UK, we have to comply with

the requirements laid out in the Cyber

Assessment Framework for Aviation which

focuses on critical systems availability.

SUB RISKS

Continuity of services

Flight and cabin crew resource

Single aircraft supplier

Protests

Industrial action

Failure of critical technology

POTENTIAL IMPACTS

> Customer dissatisfaction

> EU261 compensation and welfare payable

to customers

> Inefficient use of crew/aircraft

> Negative impact on brand

> Share price movement

> Adverse media coverage

> Reduction in revenue

> Operational disruption

CHANGE IN RISK

RISK THEME

Safety, security and operations

RISK OWNER

Chief Operating Officer

SIGNIFICANT OPERATIONAL DISRUPTION

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

RISK MANAGEMENT (CONTINUED)

MITIGATIONS

> Monthly reporting on attrition to highlight any

areas of concern to address in a timely way:

– Development of a strong Employee Value

Proposition to enable clear articulation of

the reasons to join and remain at easyJet.

– Develop cabin crew and pilot engagement

strategy and action plan.

– Implement a refreshed recognition strategy.

– Review of hybrid working arrangements to

deliver effective ways of working and an

enhanced employee experience.

– Creating a new careers website to enable an

improved experience and functionality for

potential candidates to support greater

attraction.

> Health and wellbeing digital transformation

journey underway with improved online

presence and support structures in place:

– Health and wellbeing strategy has been

developed and updated for all colleague

groups.

> Develop and agree a company-wide Diversity,

Equity and Inclusion strategic framework

– Implement agreed gender targets to

improve women representation across our

leadership population.

– Initial focus is on delivering a women’s

development programme to support the

gender targets.

SUB RISKS

Health and wellbeing

Inclusion and diversity

POTENTIAL IMPACTS

> Sustained inability to deliver key strategic

initiatives

> Loss of corporate knowledge

> Potential operational disruption and

associated costs

CHANGE IN RISK

RISK THEME

Our people

RISK OWNER

Group People Director

MITIGATIONS

> Developed SBTi-aligned net zero roadmap

which provides the framework to manage

easyJet’s climate change transition risks. It is

also a means of communicating with all

stakeholders including consumers, investors

and government.

> Taking action to reduce short to medium-term

impact by securing firm orders for more fuel

efficient A320neo and A321neo aircraft.

Reducing emissions and associated costs

further through a host of operations initiatives.

> Supporting future technologies including

hydrogen aircraft development with our

partners such as Rolls-Royce and Airbus.

Investing in Direct Air Carbon Capture and

Storage (DACCS). Securing SAF supply

through long-term contractual commitments.

> Proactive advocacy with UK and EU authorities

to ensure that policies intended to reduce

industry climate impact are appropriate and

effective in collaboration with our partners and

trade bodies.

> Robust governance through the Sustainability

Steering Committee, AMB and plc Board as

well as specific forums such as the Fuel

Conservation Working Group and

Environmental Policy Forum. Increased costs

due to climate regulation are also included in

central financial planning processes.

SUB RISKS

Consumer sentiment

Cost of emissions

Emissions reductions

Financial markets sentiment

POTENTIAL IMPACTS

> Increased operational costs driven by

regulation relating to the use of

sustainable aviation fuel, withdrawal of

free allowances under the ETS, fuel taxes,

taxation of non-carbon GHG emissions

and other air travel related charges

> Suppression of demand driven by

changes in consumer preferences

> Increased compliance and reporting

requirements

> Shareholder activism

> Adverse publicity and impact on our

reputation/brand

> Climate change-related regulatory and

legal challenge

CHANGE IN RISK

RISK THEME

Environmental sustainability

RISK OWNER

Chief Finance Officer

CLIMATE CHANGE AND TRANSITION RISKS

TALENT ACQUISITION AND RETENTION RISKS

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

GOING CONCERN AND VIABILITY STATEMENT

ASSESSMENT OF PROSPECTS

The strategic report on pages 2 to 70 sets out the

activities of the Group and the factors likely to

impact its future development, performance and

position. The Finance Review on pages 27 to 34

sets out the financial position of the Group, cash

flows, liquidity position and borrowing activity. The

notes to the accounts include the objectives,

policies and procedures for managing capital,

financial risk management objectives, details of

financial instruments and hedging activities and

exposure to credit risk and liquidity risk.

In accordance with the requirements of the 2018

UK Corporate Governance Code, the Directors

have assessed the long-term prospects of the

Group, taking into account its current position, the

updated medium-term targets set out in the

strategic plan (see page 10) and a range of internal

and external factors, including the principal risks.

The Directors have determined that a three-year

period is an appropriate timeframe for this viability

assessment. In concluding on a three-year period,

the Directors considered the reliability of forecast

information, the current macro-economic and

market conditions and longer-term management

incentives. However, it is noted that the high-level

fleet plan used by easyJet is necessarily over a

longer period to enable future planning of aircraft

deliveries underpinning the plans for fleet

modernisation, future growth, cost efficiencies and

sustainability improvements. This longer-term

planning is evidenced this year by the latest

proposed aircraft purchase transaction which, if

approved by shareholders, will secure aircraft

deliveries for the period FY29–34.

The assessment of the prospects of the Group

includes the following factors:

> The strategic plan – which takes into

consideration growth expected by way of

creating value through the business model,

market conditions, future commitments, cash

flow, expected impact of key risks, funding

requirements and maturity of existing financing

facilities (see table above right).

> The fleet plan – the plan retains some flexibility

to adjust the size of the fleet in response to

opportunities or risks.

> Strength of the balance sheet and

unencumbered assets – this sustainable

strength gives us access to capital markets.

> Risk assessment – see detailed risk assessment

on pages 61 to 66.

STRESS TESTING

The corporate risk management framework

facilitates the identification, analysis and response

to plausible risks, including emerging risks, as our

business evolves in an increasingly volatile

environment. Through our corporate risk

management process, a robust assessment of the

principal risks facing the organisation has been

performed (see pages 61 to 66) and the controls

and mitigations identified.

Both individually and combined these potential

risks are unlikely to require significant additional

management actions to support the business to

remain viable; however, there could be actions that

management would deem necessary to reduce

the impact of the risks. The stress testing

scenarios identified in the table on the next page

show that there is sufficient liquidity under all

scenarios. In the first four scenarios one of the

assumptions is that the existing Eurobonds are

refinanced, whereas in the last scenario no

refinancing of existing Eurobonds is assumed.

GOING CONCERN STATEMENT

The financial statements have been prepared on

a going concern basis. In adopting the going

concern basis for preparing these financial

statements, the Directors have considered

easyJet’s business activities, together with factors

likely to affect its future development and

performance, as well as easyJet’s principal risks

and uncertainties through to June 2025.

As at 30 September 2023, easyJet had a net cash

position of £41 million including cash and cash

equivalents of £2.9 billion, with unrestricted access

to £4.7 billion of liquidity, and has retained

ownership of 54% of the total fleet, all of which are

unencumbered.

The Directors have reviewed the financial forecasts

and funding requirements with consideration given

to the potential impact of severe but plausible

risks. easyJet has modelled a base case

representing management’s best estimation of

how the business plans to perform over the

period. The future impact of climate change on

the business has been incorporated into strategic

plans, including the estimated financial impact

within the base case cash flow projections of the

future estimated price of ETS allowances, the

phasing out of the free ETS allowances from 2024,

the expected price and quantity required of

Sustainable Aviation Fuel (SAF) usage and fleet

renewals.

The business is exposed to fluctuations in fuel

prices and foreign exchange rates. easyJet is

currently c.76% hedged for fuel in H1 of FY24 at

c.$867 per metric tonne, c.51% hedged for H2

FY24 at c.$823 and c.25% hedged for H1 FY25 at

c.$832.

In modelling the impact of severe but plausible

downside risks, the Directors have considered

demand suppression leading to a reduction in

ticket yield of 5% and a reduction in Holidays

contribution of 5%. The model also includes the

reoccurrence of additional disruption costs (at

FY22 levels), an additional $50 per metric tonne

on the fuel price, 1.5% additional operating cost

inflation and an adverse movement on the US

dollar rate. These impacts have been modelled

across the whole going concern period. In

addition, this downside model also includes a

grounding of 25% of the fleet for the duration of

the peak trading month of August, to cover the

range of severe but plausible risks that could result

in significant operational disruption. This downside

scenario resulted in a significant reduction in

liquidity but still maintained sufficient headroom

on external liquidity requirements.

The Directors also considered a separate downside

model that included the operational disruption

and adverse US dollar rate but, instead of the yield

reduction, modelled increased costs (additional

3% inflation assumed on operating costs) and an

additional $100 per metric tonne on the fuel price

compared to the base case. This scenario was not

as severe and as such still resulted in sufficient

headroom. It was not deemed plausible to

combine yield reduction and the higher cost and

fuel increases based on an analysis of historical

information across the airline industry.

After reviewing the current liquidity position,

committed funding facilities, the base case and

severe but plausible downside financial forecasts

incorporating the uncertainties described above,

the Directors have a reasonable expectation that

the Group has sufficient resources to continue in

operation for the foreseeable future. For these

reasons, the Directors continue to adopt the going

concern basis of accounting in preparing the

Group’s financial statements.

As at September 2023 Maturity date

Available funds

(drawn and undrawn)

Eurobonds October 2023 €500m

June 2025 €500m

March 2028 €1,200m

Revolving credit facility September 2025

$400m

Undrawn UKEF backed facility June 2028 $1,750m

1) Option to extend to September 2026 at lender’s consent.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

GOING CONCERN AND VIABILITY STATEMENT (CONTINUED)

VIABILITY STATEMENT

Based on the assessment performed, the

Directors have a reasonable expectation that the

Company and the Group will be able to continue in

operation and meet all liabilities as they fall due up

to September 2026. In making this statement, the

Directors have made the following key

assumptions:

1. easyJet has access to a variety of funding

options including capital markets, aircraft

financing and bank or government debt. The

stress testing demonstrates that the current

funding with refinancing of the existing

Eurobonds would be sufficient to retain liquidity

in both the base and downside scenarios

(excluding the specific lack of funding

scenario).

2. In assessing viability, it is assumed that the

detailed risk management process as outlined

on pages 59 to 66 captures all plausible risks,

and that in the event that multiple risks occur,

all available actions to mitigate the impact to

the Group would be taken on a timely basis and

have the intended impact.

3. There is no prolonged grounding of a

substantial portion of the fleet greater than

included in the downside and alternative

downside scenarios. This includes a grounding

of 25% of the fleet for the duration of the peak

trading month of August, to cover the range of

severe but plausible risks that could result in

significant operational disruption.

The key risks that are most likely to have a

significant impact on easyJet’s viability have been

considered in the stress testing across multiple

scenarios and are shown on the right. The

assumptions applied to the models are based on

plausible but severe impacts of the risks, as

assessed by review of the current macro-

economic position and historical information

across the airline industry. The principal risks have

continued to be assessed for any changes in the

risk environment. The actions in place to mitigate

against these risks are included in the Risk section

on pages 61 to 66.

Scenario modelled Description Assumptions applied Corporate risk covered

Demand suppression and

operational disruption

Downside scenario covering multiple

risks that may lead to a reduction in

demand, resulting in a prolonged yield

reduction over the period. In addition,

this scenario combines risks that also

would lead to operational disruption

and/or short-term grounding of the

fleet.

Across the whole period:

> reduction in ticket yield of 5%

> reduction in Holidays contribution

of 5%

> additional disruption costs (based

on FY22 levels).

One-off:

> a grounding of 25% of the fleet for

the duration of the peak trading

month of August.

Breach of regulatory requirements

Significant safety or security event

Significant digital security event

Network and primary airport risks

Significant operational disruption

Increase in costs and

operational disruption

Scenario covers multiple risks that

would result in an increase in costs

across the period or a significant spike

in costs. In addition, this scenario

combines risks that also would lead to

operational disruption and/or short-

term grounding of the fleet.

Across the whole period:

> additional $100 per metric tonne

on the fuel price

> increased costs (additional inflation

assumed on all costs)

> additional disruption costs (based

on FY22 levels)

> an adverse movement on the

US dollar rate.

One-off:

> a grounding of 25% of the fleet for

the duration of the peak trading

month of August.

Breach of regulatory requirements

Significant safety or security event

Significant operational disruption

Significant digital security event

Network and primary airport risks

Macro-economic conditions

Climate change

Scenario covers climate-based risks

that would result in both a reduction

in demand and increased costs. This

includes SAF and ETS costs, capex and

maintenance costs due to technology

changes and additional costs for

regulatory and legal challenge.

Across the whole period:

> reduction in demand – reduced

yields or capacity

> increased fuel costs (SAF and ETS)

> increased maintenance costs

> new taxes.

Climate change transition risks

Failure to deliver on plans

Scenario covers the risks that would

result in easyJet being unable to deliver

on its plans for the period.

Across the whole period:

> reduced initiatives income

> increased costs

> reduction in ticket yield of 5%

> reduction in Holidays contribution

of 5%.

Non-delivery of strategic initiatives

Talent acquisition and retention risks

Lack of funding

Scenario covers the risk that would

result in no further funding being

available to easyJet during the period.

Across the whole period:

> uncommitted funding excluded.

Macro-economic conditions

SECTION 172 STATEMENT

Our stakeholders are a fundamental part of our operations. We have set out on pages 95 to 98 details of

who our key stakeholders are, how we have engaged with them and the associated outcomes. Further

details are contained in the summary of the Board’s activity in the year on pages 74 to 77. Details of how

the Board has had regard to the matters set out in section 172(1)(a) to (f) can be found throughout the

Strategic and Governance reports.

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT

Our approach Our policies Due diligence, outcome and key performance indicators Related principal risks

ENVIRONMENTAL

MATTERS

We are passionate about making a

meaningful difference for our planet,

communities and people. Sustainability

is important to us and we work

tirelessly to minimise our

environmental impact across our

operations and are taking action to

pioneer a sustainable future for travel.

Read more in the Sustainability section

on pages 39 to 53

> Environment Policy – our policy focuses on

minimising the environmental impact across

the organisation.

> Net zero roadmap – our roadmap to net zero

carbon emissions by 2050 focuses on zero

carbon emission technology.

> Sustainability Strategy – easyJet’s

Sustainability Strategy has evolved to reflect

our ambition to pioneer positive change for

our planet, communities and people.

> Environment Management System (EMS)

– allows us to manage and continually improve

our environmental performance in a structured

and systematic way.

> Supplier Code of Conduct – we require our

suppliers to comply with environmental

standards.

> The Sustainability Steering Committee is responsible for monitoring

the outcome of our Sustainability Strategy, driving key sustainability-

related decisions, delivering against strategic KPIs and the

consideration and disclosure of climate-related risks and

opportunities.

> Further details on sustainability and our roadmap to net zero can be

found on pages 20 and 21, and pages 39 to 53.

> Streamlined Energy and Carbon Reporting can be found on page 45.

> Climate-related financial disclosures can be found on pages 54 to 57.

> easyJet has received IATA IEnvA Stage 2 certification, making us the

first low-cost carrier worldwide with a fully IATA IEnvA certified EMS.

> The impacts of climate change

on our business and operations,

regulation/taxation, and

changing consumer and

colleague expectations are

recognised as one of our

principal risks. More information

can be found on page 66.

> Our strategy and risk

management on climate-related

risks and opportunities can

be found in the Task Force on

Climate-related Financial

Disclosures section on pages

54 to 57.

PEOPLE

Our people are our greatest asset and

we want to continue to attract, retain

and develop top talent by focusing on

creating an inclusive and energising

environment that inspires everyone to

learn and grow, enabling the Orange

Spirit to thrive.

Read more in the People and Culture

section on pages 35 to 38

> Equal opportunity and inclusion –

encourages our employees to make the best

use of their skills and experience, and ensure

we treat staff, potential staff and the public

fairly.

> Inclusion and Diversity Framework – keeps

us focused on what is important for creating

an inclusive and diverse culture and an

authentic workforce.

> Wellbeing Strategy – drives impact and

cultural change through a programme of

activities.

> Code of Business Ethics – promotes a culture

that encourages open lines of communication

and free access to information.

> ‘Speak Up, Speak Out’ whistleblowing

process – enables easyJet employees and

suppliers to be able to raise concerns about

any safety, ethical or legal issues.

> Engagement with colleagues across the Company to ensure everyone

understands the part they play in creating an inclusive culture.

> Training for our Airline Management Board (AMB) with The Centre for

Inclusive Leadership to enable them to think and engage differently and

create a culture where everyone can thrive. More information on page 36.

> Created a behavioural framework to support our values through

engagement from various groups across the business including crew

and pilots. More information on page 35.

> Rolled out a Wellbeing Strategy to look after the heath and wellbeing of our

people which will be embedded and implemented in different communities

over time. More information on page 37.

> We continue to measure how our employees feel about the inclusive

environment that we are striving to create, through our regular employee

listening activities. More information on page 38.

> Ethical and compliance policies are monitored by the Business

Integrity Committee and People team. The Audit Committee reviews

the Business Integrity Committee’s activities quarterly.

> Stakeholder engagement (employees) on page 96.

> Whistleblowing on pages 79, 104 and 107.

> Talent acquisition and retention is

recognised as a principal risk and

we seek to control and mitigate

that risk in order to reduce its

impact. Further information is set

out on page 66.

The table below and the information

incorporated by reference comprises

our Non-Financial and Sustainability

Information Statement required by s414CA

and 414CB of the Companies Act 2006.

Read more on our business model on page 22

Many of the policies listed

below can be found on our

corporate website:

corporate.easyJet.com

Strategic report

Governance Financials

easyJet plc

Annual Report and Accounts 2023

Our approach Our policies Due diligence, outcome and key performance indicators Related principal risks

SOCIAL

MATTERS

easyJet is committed to doing the

right thing for our customers, our

people, our partners, the communities

in which we operate and the

environment.

> easyJet has a pan-European partnership with

UNICEF to support its work.

> We have an Inclusion and Diversity

Framework and a Wellbeing Strategy.

> Freedom to change – allows our customers to

change flights to a different date or route,

fee-free, up to two hours before departure.

> Travel restriction protection – allows

customers impacted by a travel ban or

mandatory hotel quarantine to change their

flights fee-free, request a voucher or a refund.

> Our cabin crew make onboard appeals for customers to make

donations in support of UNICEF’s work to protect children around

the world from disease and keep them safe during emergencies.

More information can be found on page 53.

> Created a development programme for women, with the wider goal

of increasing the number of women in leadership roles. More

information can be found on page 37.

> Social impact matters are not

considered to be principal risks.

However, these matters are

considered by the plc Board as

part of its stakeholder

engagement programme;

further information is set out

on pages 95 to 99.

HUMAN

RIGHTS

We are committed to human rights,

both in our business and our supply

chain. This includes observance of the

principles set out by the International

Labour Organization Declaration on

Fundamental Principles and Rights at

Work.

> Human Rights and Modern Slavery Policy

– supports recognised human rights principles.

> Supplier Code of Conduct – easyJet’s

suppliers have an important role in delivering

our ambition, and we strive to ensure that our

suppliers have aligned views on corporate

responsibility and compliance.

> Both induction training and annual refresher training at Group level

ensures the workforce is continually mindful of human rights and

modern slavery.

> easyJet seeks to identify and prevent adverse human rights impacts

directly linked to its business relationships, through obtaining

appropriate contractual commitments and undertaking appropriate

due diligence on suppliers (including enhanced due diligence on high

risk suppliers).

> Cross-functional modern slavery working group updates the Modern

Slavery Risk Register, ensures legal compliance, complies and

maintains up-to-date policies and procedures, identifies and

mitigates modern slavery breaches. More information can be found

on page 52.

> We continue to use the Global

Slavery Index to support our

analysis of geographic risks and

assess whether the country/

area has a high prevalence of

modern slavery or other labour

rights violations.

ANTI-CORRUPTION

AND ANTI-BRIBERY

At easyJet we conduct all of our

business in an honest and ethical

manner. We take a zero-tolerance

approach to bribery and corruption and

are committed to acting professionally,

fairly and with integrity in all business

dealings and relationships wherever

easyJet operates. We encourage our

employees and suppliers to raise

concerns on ethical issues via the ‘Speak

Up, Speak Out’ whistleblowing process.

> Anti-Bribery and Anti-Corruption Policy

– sets out the responsibilities of easyJet, and

of those working for and on behalf of easyJet,

to observe and uphold easyJet’s prohibition on

bribery and corruption.

> Gifts and Hospitality Policy – sets out the

rules on receiving and giving gifts and

hospitality.

> Code of Ethics – ethical and compliance

policies, covering topics that include bribery

and corruption, gift-giving and fraud.

> All existing and new employees receive mandatory ethics training

annually and upon joining the business.

> Risks associated with bribery and corruption are regularly reviewed

by the Audit Committee.

> Ethical and compliance policies are monitored by the Business

Integrity Committee and People team. The Business Integrity

Committee’s activities are reviewed by the Audit Committee on a

quarterly basis.

> A breach of regulatory

requirements is recognised as a

principal risk. More details can

be found on page 62.

NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT (CONTINUED)

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

CONTENTS

GOVERNANCE

Chairman’s statement

Governance highlights

Our activities in the year

Understanding the

business and culture

> Our purpose

> Our culture

> Our performance

Ensuring effective

governance

> Governance framework

> Board at a glance

> Role of the Board

> Performance review

> Board of Directors’

biographies

> Airline Management

Board biographies

Engaging with

stakeholders

> Understanding

stakeholder perspectives

> Stakeholders in decision

making

Committee reports

> Nominations Committee

Report

100

> Audit Committee

Report

103

> Finance Committee

Report

109

> Safety & Operational

Readiness Committee

Report

111

> Directors’

Remuneration Report

113

Other disclosures

131

Activities in the year

Biographies

Engaging with

stakeholders

Governance highlights

Board at a glance

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

CHAIRMAN’S STATEMENT

ENSURING EFFECTIVE

GOVERNANCE

It has been a year of considerable achievement for

easyJet, completing our return to attractive

profitability post pandemic and setting the

Company up for further success in coming years.

The Board has particularly focused on ensuring

progress is being made against our strategic

priorities whilst maintaining an appropriate

engagement in near-term operational and

commercial challenges that are an enduring

feature of the airline industry.

easyJet has set an aspiration of being ‘Europe’s

most loved airline – winning for our customers,

shareholders and people’ (read more about our

purpose and strategy on page 8). This requires

continuing progress against each of the key

priorities – building Europe’s best network,

transforming revenue, delivering ease and

reliability and driving our low-cost model. I am

pleased with the financial performance in 2023,

meeting the existing medium-term targets and

allowing the reinstatement of dividend payments.

It is also positive that as part of our longer-term

strategy we have been able to announce a

conditional agreement with Airbus for an

additional 157 aircraft order covering FY29 to

FY34 and a further 100 purchase rights, which

shareholders will be asked to approve by the end

of 2023. This not only supports our cost efficiency

goals from fuel savings and upgauging, but also

enables our longer-term growth aspirations and,

crucially, will play a key part in delivering our net

zero roadmap.

The Board is mindful that the aviation industry is

complex, demanding, and there are many factors

outside of our control, as we have seen this year

with air traffic control failures and European

industrial relations challenges. We therefore

understand the need to focus on those areas that

are within our control, whilst building a robust

resilience against those things we cannot control.

The Board has spent considerable time engaging

with the business to this end. We have also spent

time engaging with our key stakeholders and

taken steps to ensure the Board itself continues to

be appropriately effective.

We set out some of the key highlights on the next

page and I hope that the remainder of the report,

which provides more detail on our activities during

the year, gives you an insight into the breadth of

our work and our efforts to ensure easyJet serves

customers well, whilst delivering attractive

shareholder value.

I remain convinced that with its commitment to

high standards of corporate governance and a

proven strategy, easyJet can be a winner in the

evolving European airline industry and I am

committed to working with the Board,

management and wider employees to deliver

on this for all our stakeholders.

Stephen Hester

Chairman

I am pleased to present our corporate

governance report, setting out the

Board’s activities during the year along

with details of our governance

arrangements.

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

HIGHLIGHTS

UNDERSTANDING THE BUSINESS AND CULTURE

> The Board visited our base in Milan in June

2023, meeting the management team and

local airport and tourism stakeholders, and

visiting our world-leading pilot and crew

training facility to see the easyJet culture in

action. We also held our September 2023

meetings at Gatwick, meeting the local

management team along with airport and

air traffic control stakeholders.

> We have undertaken strategic deep dives into

specific countries (Spain, Portugal, Italy and

the UK) and the easyJet holidays business.

> The Board had a chance to experience the

daily operational complexity when it visited

the Integrated Control Centre in May 2023,

which manages all on-the-day crewing and

network movements.

> Our activities also extended to understanding

values and culture, with the Employee

Representative Directors (ERD) regularly meeting

with employees to understand their experiences

and feedback, and reviewing our people

strategy, whistleblowing and employee surveys

to check our culture and values are aligned.

STRATEGY AND PERFORMANCE

> We review our trading, operational and financial

performance at each Board meeting and receive

regular updates outside of meetings. As set out in

the CEO’s review the operational environment was

particularly challenging this year. The Board

therefore received weekly updates from the Chief

Operating Officer during the summer and at each

meeting discussed actions being taken to remedy

the issues where possible, for example creating

firebreaks in the middle of the Gatwick schedule

to minimise the knock-on effects from ATC delays.

> The Board also remained focused on

maintaining financial strength, repaying a €500

million Eurobond in February 2023 and

refinancing the $1.77 billion UKEF facility in June

2023, where an additional $950 million of gross

debt was repaid. The new $1.75 billion facility

includes a sustainability performance metric

linking this to milestones in our net zero

roadmap. We have also repaid a €500 million

Eurobond which matured in October 2023.

> We discussed our customer strategy and

initiatives planned to improve ease and reliability

and the customer experience. Many of these

rely on technology to be delivered, and the

Board discussed the technology roadmap twice

in the year.

ENGAGING WITH STAKEHOLDERS

> As well as the ERD meetings, the Board hosted

a breakfast with senior leaders in order to get to

know the management layer below the Airline

Management Board (AMB).

> Having set a new aviation milestone with the

world’s first run of a modern aero engine on

hydrogen with our partner Rolls-Royce, the

Board invited the Rolls-Royce team to present to

them in March 2023 in order to understand their

plans around hydrogen and net zero technology.

> When visiting Milan, the Board met

representatives from the City of Milan tourist

board and SEA Milan, the owner of Malpensa

and Linate Airports.

> In addition to engagement at the AGM, the

Chairman, CEO and CFO have regularly updated

the Board on the opinions of investors and

these are also communicated to the Board

via presentations from the Director of Investor

Relations and engagement with the brokers

and other advisers.

ENSURING EFFECTIVE GOVERNANCE

> The Board keeps its composition and the

balance of skills, diversity and experience under

regular review. We were pleased to welcome

Sue Clark as Senior Independent Director (SID)

in March 2023 and more details of her induction

are set out on page 85. Sue succeeded Julie

Southern, who along with Andreas Bierwirth,

stepped down from the Board in February 2023.

> To ensure our governance framework remains

relevant and effective, the Safety Committee

was renamed the Safety & Operational

Readiness Committee and its terms of reference

updated during the year, to better reflect the

scope of its activities. We also reviewed the

composition of the Board’s committees, the

matters reserved for Board decision and our

delegated authority framework.

> We undertook an internal Board Performance

Review and reviewed Directors’ external

appointments to ensure they have sufficient

time to devote to their role, as well as

approving additional external appointments

during the year.

More on our engagement with

stakeholders is set out on pages

95 to 99.

Business updates

> CEO, CFO, trading and operations

Strategy

> FY24–28: review market and competitive

environment

> Sustainability update including net zero

roadmap

Governance

> Review of Board Forward agenda

> Update on SID recruitment

> Appointment of Company Secretary

> Consideration of AGM matters

Stakeholders

> Assessment of resolutions to be put to

the AGM in the interests of the Company

and investors

> Remuneration Committee consultation

with investors and voting bodies on

remuneration arrangements

> Consideration of stakeholders and

long-term strategic priorities in strategy

discussion and sustainability update

> Board dinner with AMB

Business updates

> CEO, CFO, trading and operations

> Investor relations

> Safety

Strategy

> Approval of FY23 budget

> Technology, data and change update, and

status review of key programmes

Governance

> Approval of Annual Report and Accounts

including principal and emerging risks

> Board Performance Review outcomes

> ERD terms of reference and engagement

with Cabin Services team and Portfolio

team

Stakeholders

> Investor engagement around full-year

results and Annual Report and Accounts,

and with regulators and governments

> Engagement by ERD with employee

groups

DECEMBER

NOVEMBER

OCTOBER 2022

Business updates

> CEO, CFO, trading and operations

> Investor relations

Strategy

> FY24–28 strategy

> Revenue management deep dive

> Fleet requirements from 2029 onwards

Stakeholders

> Investor engagement around trading

update

> Consideration of stakeholders and

long-term strategic priorities in strategy

and fleet discussion

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

HIGHLIGHTS

APRIL

Activity

> Approval of trading update for six months

ending 31 March 2023

Stakeholders

> Investor engagement around trading

update and post-AGM matters

Q3Q2

Business updates

> CEO, CFO, trading and operations

Strategy

> Rolls-Royce update on hydrogen

technology

> FY24–28: long-term network strategy

and delivering ease and reliability

Governance

> Consideration and approval of tax

strategy and Modern Slavery Statement

Stakeholders

> Board and senior leadership breakfast

> Board and CEO dinner

> Consideration of multiple stakeholders

in reviewing tax strategy

> Consideration of employees and supply

chain relating to preventing modern

slavery

MARCH

FEBRUARY

JANUARY 2023

Business updates

> CEO, CFO, trading and operations

> Investor relations

> Regulatory and government affairs

> Safety

Strategy

> Country deep dive: Spain and Portugal

> Sustainability

Governance

> Approval of Safety & Operational

Readiness Committee terms of reference

and changes to Committee composition

Stakeholders

> Investor engagement around AGM

> Consideration of regulators and

government and investors stakeholder

groups

> Consideration of stakeholders and

long-term strategic priorities in Spain

and Portugal

Business updates

> CEO, CFO, trading and operations

> Approval of Q1 trading update

Governance

> Appointment of Senior Independent

Director

Stakeholders

> Investor engagement around first quarter

trading update and AGM

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

HIGHLIGHTS

BASE VISIT

milan, italy

In June 2023, Board members spent two days

visiting our base at Malpensa Airport in Milan, Italy,

to understand the scale of the easyJet operation in

the country and review our strategy in Milan and

the Italian market. easyJet is the second biggest

airline in Italy. Malpensa became an easyJet base in

2006 and is the largest easyJet base in continental

Europe, with a dedicated terminal. Milan is also

home to our world-leading pilot and crew training

facility, operated in partnership with CAE for the

benefit of our European crew and training around

5,000 employees a year.

The itinerary was designed to allow the Board

to see as much of the operation in the allotted

time and gain a deeper understanding of our

European operations. The visit included:

> A deep dive with the local management team

into the Italy country strategy, performance and

stakeholder considerations.

> Visiting the CAE training centre and having a

tour of the pilot and crew training facilities led

by easyJet’s Director of Training Operations.

> Participating in a session in the pilot training

A320 simulators, experiencing the market-

leading technology first hand.

> A tour of Malpensa and Linate Airports and

meeting with the operators of both airports,

Società Esercizi Aeroportuali (SEA), to

understand future strategy and how we can

partner to improve the customer experience.

> A presentation from Diego Babuder, an easyJet

pilot based in Milan who is undertaking a PhD on

Sustainable Aviation, on his PhD research into

new technologies such as hydrogen and

sustainable aviation fuels, and the impact of

each technology on airport operations and

infrastructure.

The visit enabled the Board to directly engage

with our employees, seeing the easyJet culture in

action, and allowed them to spend more time

together as a group, in line with the Board

Performance Review outcomes from the

prior year.

(CONTINUED)

JUNE

MAY

Business updates

> CEO, CFO, trading and operations updates

Strategy

> Country deep dive: Italy

> Update on fleet requirements

> Sustainability

Stakeholders

> Investor conference attended by CFO

> Discussions with City of Milan tourist

board and SEA Milan, the owner of

Malpensa and Linate Airports, around

economic environment in Italy and

future plans

> Consideration of stakeholders and

long-term strategic priorities in Italy

> Consideration of multiple stakeholder

groups when developing fleet plans

Business updates

> CEO, CFO, trading and operations

> Investor relations

> Digital Safety Programme (including

cybersecurity)

> Approval of half-year results

Strategy

> FY24–28: transforming revenue

capability, driving our low-cost model

> Technology, data and change update

and status review of key programmes

> Approval of a new undrawn five-year

sustainability-linked term loan facility

of $1.75 billion

Governance

> Review of principal risks at half year

> Annual review of delegated authorities

and matters reserved for the Board

Stakeholders

> Investor engagement around half-year

results

> Consideration of long-term strategy

and purpose

> Review of financial position and debt

facilities and consideration of investor

and other stakeholders entering into

new term loan facility with sustainability

metrics attached

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

HIGHLIGHTS

Business updates

> CEO, CFO, trading and operations

> Approval of Q3 trading update

> Safety

Strategy

> easyJet holidays deep dive

> Fleet requirements from 2029 onwards

Governance

> Approval of revised Inside Information

Policy and Share Dealing Code

> ERD update

Stakeholders

> Investor engagement around trading

update

> Operations and Customer Seminar with

investors

> Consideration of long-term strategy for

easyJet holidays

> Consideration of multiple stakeholder

groups when developing fleet plans

Business updates

> CEO, CFO, trading and operations

> Safety

> Sustainability

> Investor relations

Strategy

> Review of FY24 budget

> Country deep dive: UK

> Fleet requirements from 2029 onwards

> Customer brand and marketing update

Governance

> Board Performance Review

Stakeholders

> Investor conference in London attended

by CEO

> Consideration of stakeholders and

long-term strategic priorities in the UK

> Engagement with Gatwick Airport

Limited on operations at London

Gatwick Airport, and NATS regarding

air traffic control

BASE VISIT

London, gatwick

In September 2023, the Board held two days of

meetings at easyJet’s largest base, London

Gatwick. The Board met with local management

teams and key suppliers. This included

representatives from Gatwick Airport Limited

(GAL), the operators of the airport and a key

supplier, and NATS, the air traffic control

providers, to discuss the staff shortages and

poor performance over the summer, including

the outage in August. The Board pressed both

GAL and NATS to make major improvements in

their performance as their performance during

summer 2023 had negatively impacted easyJet

customers.

The Board also visited the operations centre at

the airport and had a tour of the North Terminal

operations, which gave them an opportunity to

meet easyJet and DHL ground handling staff

who manage operations on the front line, and

understand end-to-end procedures of an airport

terminal including takeoff, landing, navigation

and communication facilities.

SEPTEMBER

JULY

easyJet plc

Annual Report and Accounts 2023

Strategic report Financials

Governance

UNDERSTANDING THE BUSINESS AND CULTURE

OUR PURPOSE

easyJet’s purpose is ‘Making low-cost travel easy’.

We are passionate about connecting people by

making travel easy, enjoyable and affordable for

customers, whether for leisure or business. Our

purpose defines who we are and guides the Board

actions and decision making. Our strategic

priorities are aligned with our ambition to be

Europe’s most loved airline, winning for our

shareholders, customers and our people. Further

information on the way that easyJet uses its

resources to fulfil this purpose and create

sustainable value is set out in our business model

on page 22.

To ensure our strategic priorities are embedded

in Board discussion, the papers presented to the

Board clearly draw out the purpose, connection

and alignment to the strategic priority to aid the

Board’s decision making.

OUR CULTURE

easyJet has a unique culture, which is open,

positive and collaborative, and is embodied as

the ‘Orange Spirit’. The Board seeks to ensure

these values are integrated into its decision

making and that the policies and procedures put

in place maintain this culture. Where policies,

practices or behaviour are not aligned with the

Company’s purpose, values or strategy, the Board

and management seek to ensure that appropriate

action is taken. Examples during the year include

reviewing the outcomes of the Your Voice Matters

survey to identify hotspots within the business;

reviewing the people strategy and promises to

ensure the right levels of engagement and

behaviours were being achieved; embedding a

compliance role in the Risk & Assurance team to

map current policies and owners to ensure they

are effective and regularly reviewed; and reviewing

the ‘Speak Up, Speak Out’ cases and trends.

Our culture is underpinned by the values and

behaviours we call ‘Our Promises’.

An understanding of, and connection

with, easyJet’s business and culture is

fundamental for our Non-Executive

Directors to enable them to maximise

their contribution to Board discussions

and monitor performance.

OUR BUSINESS

AND CULTURE

How the Board monitored culture in 2023

As well as aiming to lead by example, the Board

uses a number of methods to understand, monitor

and assess the Company’s culture:

Employee engagement

> Reviewing the results of the employee survey –

Your Voice Matters – enables the Board to

understand the employee experience and make

an assessment of the Company’s culture in

practice. This also enables the Board to

understand the working practices within the

organisation and how it aligns with the purpose

and strategic priorities of the Group. More detail

on this year’s Your Voice Matters survey can be

found on page 38.

> Employees were encouraged to get involved in

defining the behaviours that underpin our

promises during the year, via online polls and

focus groups. Insight from these discussions

along with feedback from the Your Voice

Matters survey helped in the development of a

behavioural framework. This framework will be

embedded into key stages of employee

experience, including how we attract, recruit,

onboard, reward and recognise our people. The

Board received an update on the behavioural

framework and will continue to monitor the

trends in the behaviour of the workforce.

Further detail on the behaviour framework can

be found on page 35.

> The ERDs meet various employee groups

regularly to understand their experiences, their

concerns, priority issues and a view of the

employee engagement across the organisation.

The ERDs provide an update to the full Board

following these meetings on the discussion and

key themes raised during the meeting. Further

detail is set out on page 82.

> The Board hosted a breakfast with members

of senior management to get to know the

management layer below the AMB. This

provided an opportunity for the Board to

engage directly and build an understanding

of their roles.

> Induction meetings also provide an opportunity

for the Directors to ask questions about the

culture in one-to-one sessions with senior

management.

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UNDERSTANDING THE BUSINESS AND CULTURE (CONTINUED)

Base visits

> These visits help the Board see easyJet’s culture

in action. The Board also toured the Integrated

Control Centre in Luton during the year, which

manages all on-the-day crewing and network

movements. This enabled the Board to

understand the complexity of the daily

operation and understand where new

technology, such as AI, could play a role in

future.

Read more on pages 111 and 112

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UNDERSTANDING THE BUSINESS AND CULTURE (CONTINUED)

OUR PERFORMANCE

easyJet’s strategy is set out on pages 12 to 19,

and part of the Board’s role is overseeing

management’s execution of the strategy. The

Board’s forward agenda is designed to ensure that

the Board considers a balance of business

updates, strategic and governance matters, while

maintaining an appropriate focus on monitoring

management’s delivery of the strategy and

progress against longer-term objectives, which

can be seen in the summary of activities in the

year on pages 74 to 77.

How the Board monitored performance in 2023

The Board received updates on trading,

operational and financial performance at each

Board meeting and challenged management

on trends, actions and progress against the

strategic initiatives:

Trading

> The Board reviewed the trading performance at

each meeting via an update from the Chief

Commercial Officer, reviewing demand trends,

pricing, load factors, the impact of marketing

campaigns and other commercial initiatives. This

included a deep dive on revenue management.

Operations

> The Board received updates from the Chief

Operating Officer at each meeting, and during

peak summer received weekly updates setting

out the operational performance metrics and

actions being taken where relevant to respond

to the operational challenges.

Finance

> The Chief Financial Officer updated

the Board at each meeting on the financial

performance of the Company. This included

reviewing costs, revenue, net debt and cash

balances. The Board approved the repayment

of £1.2 billion of debt in the year, and entering into

the new sustainability-linked term loan facility.

Budget

> The Board reviewed the previous year’s

performance versus budget and competitor

performance; monitored FY23 financial

performance against budget throughout the

year; and reviewed the draft budget for FY24.

Strategy

> The Board regularly reviewed easyJet’s

operational and financial performance against

the Company’s strategy and KPIs; reviewed

country and business area deep dives; and

received regular strategic updates in a number

of key areas, including those listed below.

Customer

> The Board received presentations from the

Chief Customer and Marketing Director on

customer satisfaction, the customer strategy

and initiatives planned to improve ease and

reliability and the customer experience.

Technology

> The Chief Data & Information Officer updated

the Board on the Technology, Data and Change

Programme and status of the various

workstreams, and the Board challenged the

team to accelerate progress wherever possible.

Sustainability

> There were several updates during the year on

progress towards easyJet’s net zero roadmap and

delivery of the sustainability strategy. The Board

also received a presentation from Rolls-Royce on

their plans for net zero technology, and reviewed

easyJet’s performance in ESG ratings and

upcoming disclosure requirements.

People

> The CEO updates the Board on people matters

regularly, including updates on the outcome of

the Your Voice Matters survey.

How the Committees monitored

performance in 2023

> The Nominations Committee monitored the

Company’s progress against diversity targets

and succession plans, and reviewed the Board’s

performance through the annual Board

Performance Review.

> The Audit Committee monitored progress on

the continual programme of improvement to

easyJet’s financial control framework and the

corporate risk plan through regular updates at

meetings and feedback from the external

auditors.

> The Finance Committee monitored the

performance of easyJet’s fuel and capex

hedging policies, liquidity management and

balance sheet policies.

> The Remuneration Committee reviewed

progress on the gender pay gap, how effective

the Remuneration Policy was in incentivising

management to deliver the Company’s strategic

objectives, and how performance and outcomes

benchmarked against others.

> The Safety & Operational Readiness Committee

monitored safety and operational performance

metrics through incident and risk trackers, deep

dive sessions on key risks and operational areas,

and regular reports from the Director of Safety,

Security & Compliance and the Chief Operating

Officer.

More information on the role of the Committees

and their work through the year can be found on

pages 100 to 130.

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GOVERNANCE FRAMEWORK

ENSURING EFFECTIVE GOVERNANCE

Read more on pages 109 and 110Read more on pages 103 to 108 Read more on pages 111 and 112 Read more on pages 113 to 130Read more on pages 100 to 102

SHAREHOLDERS

CHAIRMAN

The Chairman leads the Board and is responsible for ensuring it operates effectively through productive debate and challenge.

THE BOARD

The Board is responsible for providing leadership to the Group. It does this by setting strategic priorities and overseeing their delivery in a way that is aligned with easyJet’s culture. It enables sustainable

long-term growth while maintaining a balanced approach to risk within a framework of effective controls and taking into account the interests of a diverse range of stakeholders. The Board is also

responsible for our sustainability strategy and environmental (climate change), social and governance matters, as well as cybersecurity (digital safety).

A full schedule of matters reserved for its decision can be found on our website at: corporate.easyJet.com.

Biographies

Read more on pages 74 to 77

Nominations Committee

To evaluate the balance of skills,

knowledge, experience and diversity on

the Board, and keep the composition,

structure and size of the Board and its

Committees under regular review.

To provide succession planning for

senior executives and the Board, leading

the process for all Board appointments.

To oversee the Board elements of the

Inclusion and Diversity Policy and

monitor Group-wide initiatives.

Audit Committee

To monitor the integrity of the Group’s

financial and narrative reporting, and

the adequacy and effectiveness of the

systems for risk management and

internal control.

To monitor the effectiveness and

independence of the internal and

external auditors.

Finance Committee

To review and monitor the Group’s

treasury policies, treasury operations

and funding activities, along with the

associated risks and provide approvals

in relation to fuel, currency and interest

rate hedging, letters of credit and

guarantees.

Safety & Operational

Readiness Committee

To oversee easyJet’s safety strategy to

address existing and emerging safety

risks, identify and monitor any new,

emerging or changing safety risks, ensure

an appropriate governance framework is

in place and receive reports on

operational performance indicators.

Remuneration Committee

To set remuneration for all Executive

Directors, the Chairman and the Airline

Management Board (AMB), including

pension rights and any compensation

payments.

To oversee remuneration and workforce

policies and practices and take these

into account when setting the policy for

Directors’ remuneration.

BOARD COMMITTEES

The terms of reference of each Committee are documented and agreed by the Board. The Committees’ terms of reference are available on our website at: corporate.easyJet.com.

The key responsibilities of each Committee are set out below.

CHIEF EXECUTIVE

Responsible for the day-to-day running of the Group’s business and performance, and the development and implementation of strategy.

AIRLINE MANAGEMENT BOARD

Led by the Chief Executive, the AMB members are collectively responsible for driving the performance

of the Group against strategic KPIs and managing the allocation of central funds and capital.

THE BOARD

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Chief Executive

> Responsible for recommending the Group’s

strategy to the Board and for delivering the

strategy once approved.

> Together with the Chief Financial Officer,

monitors the Group’s operating and financial

results and directs the day-to-day business

of the Group.

> Responsible for recruitment, leadership and

development of the Group’s executive

management team below Board level.

> Keeps the Chairman and the Board appraised

of important and strategic issues facing

the Group.

> Supports and works closely with the

Chairman, the Chief Executive and the Chairs

of the Board Committees in setting agendas

for meetings of the Board and its

Committees.

> Supports the provision of accurate, timely and

clear information flows to and from the Board

and the Board Committees, and between

directors and senior management in order to

ensure that the Board has the information

and resources it needs in order to function

effectively.

> Supports the Chairman in designing and

delivering Directors’ induction programmes

and the Board and Committee performance

evaluations.

> Provides advice and support to the Board and

individual Directors on corporate governance

matters and Board procedures and is

responsible for administering the Share

Dealing Code and the Annual General

Meeting.

Chairman

> Responsible for leadership of the Board and

ensuring effectiveness in all aspects of its role.

> Responsible for setting the Board’s agenda

and ensuring adequate time is available for

discussion of all agenda items, including

strategic issues.

> Responsible for encouraging and facilitating

active engagement by and between all

Directors, ensuring a culture of openness is

maintained and drawing on each of their

extensive skills, knowledge and experience.

> Ensures effective engagement between the

Board, its shareholders and key stakeholders.

Senior Independent Director

> Acts as a sounding board for the Chairman and

as an intermediary for the other Directors when

necessary.

> Responsible for addressing shareholders’

concerns that have not been resolved through

the normal channels of communication with the

Chairman, Chief Executive or Chief Financial

Officer.

> Responsible for evaluating the performance

of the Chairman in consultation with the other

Non-Executive Directors.

Non-Executive Directors

> Provide an external perspective, sound

judgement and objectivity to the Board’s

deliberations and decision making.

> Use their diverse range of skills and expertise

to support and constructively challenge the

Executive Directors and monitor and scrutinise

the Group’s performance against agreed goals

and objectives.

> Responsible for determining appropriate levels

of executive remuneration, appointing and

removing Executive Directors, and succession

planning through their membership of the

Remuneration and Nominations Committees.

> Review the integrity of financial reporting and

that financial controls and systems of risk

management are robust.

Employee Representative Directors

> Provide the mechanism for the Board to engage

with the workforce in line with the Corporate

Governance Code.

> Responsible for meeting the Company’s

European Works Council (EWC) and

Management & Administration Consultative

Group (MACG) at least once a year, and other

works councils on a periodic basis, along

with other informal engagement.

> Provide regular updates to the Board to

ensure employee voice is clearly reflected

in the boardroom.

Chief Financial Officer

> Supports the Chief Executive in developing

and implementing strategy.

> Provides financial leadership to the Group

and alignment between the Group’s business

and financial strategy, including developing

the Group’s annual budget prior to the formal

agreement of the Board.

EXECUTIVE DIRECTORS COMPANY SECRETARYINDEPENDENT NON-EXECUTIVE DIRECTORS

Financials

Governance

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Annual Report and Accounts 2023

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

BOARD AT A GLANCE

The Board continues to meet

best practice guidelines for

independence and ethnic

diversity and keeps the balance

of skills, knowledge and

experience on the Board under

regular review. Biographies are

set out on pages 89 to 91.

Board composition as at 30 September 2023

Male 6

Female 4

White 9

Asian 1

Dutch 1

German 2

Swedish 1

UK/French 1

UK 5

0–3 years 6

3–6 years 4

Chairman 1

Executive Directors 2

Non-Executive Directors 7

Gender Ethnicity Nationality Tenure

Independence

Airline/Travel Finance Strategy

Safety/

Sustainability

Commercial/

Consumer

Digital/

Marketing Ex CEO/CFO Board Audit Finance Nominations Remuneration

Safety &

Operational

Readiness

Stephen Hester

10/10 – – 3/3 – –

Johan Lundgren

10/10 – – – – –

Kenton Jarvis

10/10 – – – – –

Sue Clark

1 ,4

5/5 1/2 – 2/2 – 1/2

Catherine Bradley CBE

10/10 4/4 4/4 3/3 – –

Ryanne van der Eijk

10/10 – – – – 4/4

Harald Eisenächer

10/10 – 4/4 – 4/4 –

Moni Mannings

10/10 – – 3/3 4/4 –

David Robbie

10/10 4/4 4/4 2/2 4/4 –

Dr Detlef Trefzger

3 ,4

10/10 3/4 – 2/2 – 4/4

Dr Andreas Bierwirth

5/5 – 1/1 – – 1/1

Julie Southern

5/5 2/2 – 1/1 2/2 1/1

1) Sue Clark was appointed to the Board on 1 March 2023.

2) Dr Andreas Bierwirth and Julie Southern stepped down from the Board on 9 February 2023.

3) David Robbie and Dr Detlef Trefzger joined the Nominations Committee on 9 February 2023.

4) Absences were due to unavoidable prior commitments. Directors who are unable to attend

meetings continue to receive the papers in advance of the meeting and have the opportunity

to discuss with the relevant Chair or the Company Secretary. Feedback is provided on the

decisions taken at the meeting.

Skills and experience Meeting attendance

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ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

The matters reserved for the Board and the

terms of reference of the Board Committees

are available on our corporate website at

corporate.easyJet.com.

INDIVIDUAL ROLES

Further information on each of the Board

members’ roles and that of the Company

Secretary is set out on page 82. Biographies are

set out on pages 89 to 91. The roles of Chairman

and Chief Executive are set out in writing, clearly

defined and approved by the Board. These are

also available on easyJet’s corporate website at

corporate.easyJet.com.

ROLE OF THE BOARD

Our governance framework is set out on page 81.

The Board provides effective leadership by setting

the strategic priorities of the Group and

overseeing management’s execution of the

strategy in a way that enables sustainable

long-term growth, while maintaining a balanced

approach to risk within a framework of prudent

and effective controls. Our robust governance

framework is also instrumental in ensuring our

strategy is delivered successfully.

The Board is collectively responsible for promoting

the long-term sustainable success of the Group,

generating value for shareholders as a whole and

contributing to wider society by fulfilling its

purpose. In exercising this responsibility, the Board

considers all relevant stakeholders including

customers, employees, suppliers, shareholders, the

communities we operate in, regulators and

governments, and the effect of the activities of

the Group on the environment. Further information

on how we have engaged with our stakeholders

and the outcomes of that engagement, can be

found on pages 95 to 99.

The activities of the Board during the year can

be found on pages 74 to 77.

Each Board meeting follows a carefully tailored

agenda agreed in advance by the Chairman, Chief

Executive Officer and Company Secretary. The

Company Secretary provides support to the

Chairman in planning the Board’s forward agenda

to ensure appropriate matters are brought to the

Board’s attention throughout the year. The agenda

items correspond to the strategic priorities and

take into consideration the impact of stakeholders.

The Board has a formal schedule of matters

reserved for its decision and is assisted in its work

by its Committees. Each Committee Chair reports

to the Board on matters discussed at Committee

meetings and highlights any significant issue that

requires Board attention.

APPOINTMENTS TO THE BOARD

The Nominations Committee leads the process for

appointments to the Board and ensures plans are

in place for the orderly succession to both Board

and senior management. The activities of the

Nominations Committee are set out in its report

on pages 100 to 102.

The Board ensures that appointments are made

on merit against objective criteria to ensure

Non-Executive Directors can apply their wider

business skills, knowledge and experience to the

oversight of the Group, and provide input and

challenge in the boardroom to assist in the

development and execution of the Board’s

strategy. Similarly, Executive Director

appointments are made to ensure the effective

implementation of the Group’s strategy.

The Nominations Committee, on behalf of the

Board, reviews the composition of the Board at

least annually, identifying any areas of skills,

experience and knowledge that can be

strengthened further. Due consideration is given to

all aspects of diversity, including gender, ethnicity,

age, sexual orientation, disability and education,

professional and socio-economic backgrounds and

personal strengths.

A number of changes to Board occurred during

the year:

> Sue Clark was appointed as Senior Independent

Director with effect from 1 March 2023.

> Dr Andreas Bierwirth stepped down from the

Board on 9 February 2023 after serving nearly

nine years on the Board, as per corporate

governance best practice.

> Julie Southern also stepped down from the

Board on 9 February 2023, following her

appointment as Chair Designate of RWS

Holdings plc.

Maaike de Bie stepped down as Group General

Counsel and Company Secretary during the year

and the Board approved the appointment of Ben

Matthews as Group Company Secretary with

effect from 1 January 2023.

Following the above changes, and to ensure the

Committees continue to have an appropriate

combination of skills, experience and knowledge,

the Board approved changes to the Committee

memberships on the recommendation of the

Nominations Committee:

> David Robbie succeeded Julie Southern as

Chair of the Audit Committee.

> Dr Detlef Trefzger succeeded Dr Andreas

Bierwirth as Chair of the Safety & Operational

Readiness Committee.

> David Robbie and Dr Detlef Trefzger became

members of the Nominations Committee.

> Sue Clark became a member of the Audit,

Nominations and Safety & Operational

Readiness Committees.

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INDUCTION

Following appointment, all Directors receive a

tailored induction programme designed through

discussion with the Chairman and Company

Secretary. Further detail is set out under Director

Inductions.

INDEPENDENCE

The Board consists of 10 Directors – the Chairman,

two Executive Directors and seven independent

Non-Executive Directors. Over half our Board

(excluding the Chairman) are independent

Non-Executive Directors and the composition of all

Board Committees complies with the Corporate

Governance Code. Additionally, the Chairman was

considered independent on appointment.

The independence of the Non-Executive

Directors is considered by the Board and reviewed

on an annual basis. The Board considers factors

such as length of tenure and relationships or

circumstances that are likely to affect, or appear

to affect, the Directors’ judgement, in determining

whether they remain independent. Non-Executive

Directors do not participate in any of the Group’s

share option or bonus schemes.

As part of the Board Performance Review, the

Board concluded that all of the Non-Executive

Directors continue to remain independent in

character and judgement, and are free from any

business or other relationships that could

materially affect the exercise of their judgement.

Topics Session with

Purpose, business model, strategic priorities,

insights into various functions of the business,

five-year plan and fleet overview

Chief Executive Officer

Members of the AMB

Strategy Director

Sustainability strategy and net zero roadmap

Director of Sustainability

Financial performance

Chief Financial Officer

Treasury policies, liquidity management,

revenue management, trading performance,

budget, cost efficiency programme and

financial controls

Director of Treasury

Finance Director: FP&A

Chair of the Finance Committee

Procurement and supply chain management

Director of Procurement

Risk and assurance including risk management

framework and audit briefing

Director of Risk & Assurance

External auditors (PWC)

Chair of the Audit Committee

Operational performance including summer

2023 readiness

Chief Operations Officer

Health and safety including briefing on AOC

structures, safety management and regulatory

framework

Director of Safety, Security & Compliance

Engineering and maintenance overview

Director of Engineering & Maintenance

Cabin services overview

Director of Cabin Services

Corporate governance and Market Abuse

Regulations

Company Secretary

Shareholder relationships,

analyst views

Director of Investor Relations

Company’s Brokers

Government relationships and lobbying positions

Director of Government Affairs

Our people, wellness and inclusion strategy,

industrial relations, succession planning,

reward and remuneration

Group People Director

Head of Reward

Director inductions

Ryanne van der Eijk, Harald Eisenächer and

Dr Detlef Trefzger, who joined the Board last

year, continued to follow their induction

programme into this year, as set out in the

2022 Annual Report.

Sue Clark joined the Board as Senior

Independent Director on 1 March 2023. Her

induction programme covered a range of key

areas of the business, and included meetings

with key colleagues across the business,

examples of which are listed to the right. Sue

was also given a detailed Board induction

pack containing Company and Board

information to assist with building an

understanding of the business, how it runs

and operates, the key markets and teams,

and to provide an understanding of the

Group’s main relationships and risks. The pack

also included information on the Board’s

composition and governance framework,

and the responsibilities of a Director.

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ATTENDANCE

Details of the Directors’ attendance at the Board

and Committee meetings held during the year can

be found on page 83.

The core activities of the Board and its

Committees are covered in scheduled meetings

held during the year. Additional ad hoc meetings

may be held to consider and decide matters

outside of the scheduled meetings when required.

Non-Executive Directors are encouraged to

communicate directly with each other and senior

management between Board meetings. In

addition to the regular Board meetings, and to

provide opportunities for the Board to engage

with senior management to discuss key elements

of the business, a number of Board dinners and

lunches were held, as well as a breakfast with

management detailed further on page 73.

Directors are encouraged and invited to attend all

Board and Committee meetings, but in certain

circumstances meetings are called at short notice

or, due to prior business commitments and time

differences, Directors may not always be able to

attend. During the year, Sue Clark and Dr Detlef

Trefzger both had to miss Committee meetings

due to unavoidable clashes with commitments

from prior to their appointment.

Even if a Director is unable to attend a meeting,

they continue to receive the papers and have the

opportunity to discuss with the relevant Chair or

the Company Secretary any matters on the

agenda which they wish to raise. Feedback is

provided to the Directors not able to attend on the

decisions taken at the meeting.

The Chairman holds regular meetings with the

Non-Executive Directors without the Executive

Directors present. There is a standing agenda item

at the end of each Board meeting for the

Non-Executive Directors to meet without the

Executive Directors.

For further information regarding when Board

members joined or stepped down from

committees during the financial year, please

refer to page 101.

TIME COMMITMENT AND EXTERNAL APPOINTMENTS

The expected time commitment of the Chairman

and Non-Executive Directors is agreed and set out

in writing in the Letter of Appointment, available on

our corporate website at corporate.easyJet.com.

For the Chairman, this is a minimum of one day per

week, and for Non-Executive Directors a minimum

of three days per month.

The Directors often spend time in excess of this

minimum requirement, for example the Chairman

meets with the Chief Executive Officer and other

members of the AMB regularly and undertakes

regular base visits across Europe.

As part of the Board Performance Review, the

Board has considered the individual Directors’

attendance, their contribution, and their external

appointments, and is satisfied that each of the

Directors is able to allocate sufficient time to the

Group to discharge his or her responsibilities

effectively. As evidenced by the attendance table

on page 83, the attendance remained high and

demonstrates the Directors’ ability to devote

sufficient time to their role.

Executive Directors and the AMB are permitted to

take up non-executive positions on the board of

one other listed company as long as this is not

deemed to interfere with the business of the

Group.

In line with the Corporate Governance Code,

Directors are required to seek Board approval prior

to taking on any additional external appointments

and the following were approved during the year

in line with this requirement:

> Ryanne van der Eijk’s appointment as a member

of the Supervisory Board of Krasnapolsky Hotels

& Restaurants NV, a private company.

> Dr Detlef Trefzger’s appointment as a Non-

Executive Director of SATS Ltd (a company

listed in Singapore) and PSA International, a

private company.

Prior to these appointments, the Board considered

the time required, including whether the role

would impact the Director’s ability to devote

sufficient time to their current role, and concluded

that the appointments would not interfere with

their roles with the Company.

The Board is mindful of differing policies and

guidelines amongst individual shareholders and

proxy advisers on the number of appointments

the Directors should hold. However when

reviewing the contribution of individual Directors,

the Board reviews their attendance, their

availability to attend ad hoc meetings and their

contribution outside of meetings. Following this

review, the Board is comfortable that all Directors

continue to devote sufficient time to discharge

their duties.

ELECTION AND RE-ELECTION

All Board appointments are subject to continued

satisfactory performance following the Board’s

annual performance review. The Company’s Articles

of Association require the Directors to submit

themselves for election or re-election by

shareholders at every AGM. All Executive and

Non-Executive Directors will stand for election or

re-election at the Company’s next AGM.

TRAINING AND DEVELOPMENT

Directors’ training and development needs are of

key importance in order to discharge their duties

effectively. Directors are encouraged to highlight

specific areas where they feel their skills or

knowledge would benefit from further

development as part of the annual Board

evaluation process. Training opportunities are

provided through internal meetings, workshops,

presentations and briefings by internal advisers

and business heads, as well as external advisers.

On joining the Board, all newly appointed Directors

receive a full, formal and tailored induction, further

details of which can be found on page 85.

CONFLICTS OF INTEREST

Directors have a statutory duty to avoid situations

in which they have, or may have, interests that

conflict with those of easyJet, unless that conflict

is first authorised by the Board. The Company has

in place procedures for managing conflicts of

interest. The Company’s Articles of Association

also contain provisions to allow the Directors to

authorise potential conflicts of interest so that a

Director is not in breach of his or her duty under

company law.

Should a Director become aware that he or she

has an interest, directly or indirectly, in an existing

or proposed transaction with easyJet, they should

notify the Board in line with the Company’s

Articles of Association. If a conflict does arise, the

Director is excluded from discussions. Directors

have a continuing duty to update any changes to

their conflicts of interest.

INFORMATION AND SUPPORT

All members of the Board are supplied with

appropriate, clear and accurate information in a

timely manner covering matters which are to be

considered at forthcoming Board or Committee

meetings. The papers for each meeting are made

available via an electronic Board portal along with

supporting and reference material at least one

week in advance of the meeting to allow for

sufficient time for detailed review and

consideration prior to the meetings.

The Company Secretary acts as the Secretary of

the Board and its Committees and attends all

meetings. The Company Secretary is responsible

for advising the Board on all governance matters

and ensuring that Board procedures are complied

with. Where Directors deem it necessary to seek

independent legal advice about the performance

of their duties with the Group, they are entitled to

do so at the Group’s expense.

The Company Secretary meets with the Non-

Executive Directors individually to discuss any

additional support they may require in order to

perform their duties.

easyJet plc

Annual Report and Accounts 2023

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Governance

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

easyJet follows the principles of the 2018 UK

Corporate Governance Code (Corporate

Governance Code) which sets out the standards

of good practice in relation to how a company

should be directed and governed. The full text of

the Corporate Governance Code is available at

frc.org.uk.

The Board is pleased to confirm that the Company

has applied the Principles of the Corporate

Governance Code and complied with all the

Provisions throughout the year. Our compliance

with key areas of the Corporate Governance Code

is summarised in this section together with cross

references, where applicable, to the relevant

sections of this report where more information can

be found (together with the Directors’

Remuneration Report on pages 113 to 130 and the

Other Disclosures’ section on pages 131 to 134).

As required by the Corporate Governance Code,

the Board confirm that they consider that the

Annual Report, taken as a whole, is fair, balanced

and understandable and provides the information

necessary for the shareholders to assess the

Company’s position and performance, business

model, and strategy. Further detail on how this

conclusion was reached can be found in the Audit

Committee Report on page 106.

BOARD PERFORMANCE REVIEW

In line with the Corporate Governance Code, the

Board undertakes a rigorous annual review of the

performance of the Board, its Committees, the

Chair and individual Directors. The review aims to

identify the Board’s strengths and any

opportunities for improvement, as well as

highlighting any training and development needs.

The Board follows a formal three-year cycle for

an externally facilitated annual review. The 2021

Board evaluation was externally facilitated

by Manchester Square Partners, and therefore

the 2022 and 2023 performance reviews were

planned to be facilitated internally by the

Nominations Committee and, in relation to the

Chairman’s performance, the Senior Independent

Director.

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

2022 BOARD PERFORMANCE REVIEW

The 2022 performance review was facilitated internally by the Nominations Committee and, in relation to

the Chairman’s performance, the Senior Independent Director. The process and outcomes

of this review were set out fully in last year’s Annual Report, with an update provided below:

AREA ACTION AND OUTCOME

Continued focus on succession

planning throughout the

business.

The Nominations Committee and Board continued to

review the talent pipeline and succession planning for

AMB as well as Board composition. During the year, the

Nominations Committee led the process for the

appointment of the Senior Independent Director and

reviewed plans for succession planning more generally.

Refinement of the Board forward

agenda, with deep dives on

customer experience, people

and culture.

The Board forward agenda was refreshed during the

year to improve the cadence of Board meetings as well

as to ensure items related to strategic priorities have

sufficient time on the agenda.

The Board forward agenda also emphasised ensuring

items related to stakeholders were included on the

agenda to reflect the upcoming priorities. For example,

customer updates, regulatory and government affairs

updates, Employee Representative Director updates

and investor relations updates.

Reviewing the remit and

membership of the Board’s

Committees.

Following the changes in composition of the Board, the

Committee membership was refreshed to ensure each

of the Committees had a relevant skill and expertise.

The remit of the Safety Committee was also amended

to better reflect its scope of activities. Further details

are set out in the Safety & Operational Readiness

Committee Report on page 111.

Allowing sufficient time together,

formally and informally, to

continue to build relationships

with newer members of the

Board and management.

The Board has had the opportunity to meet in person

both formally and informally at Board meetings as well

during visits held in Milan and Gatwick. The Chair

periodically meets with the Non-Executive Directors

(NEDs) individually and after each Board meeting NED

only sessions are held for the Board to discuss matters

without the executives being present. Four Board

dinners were held during the year.

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ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

The evaluation of the Chairman was led by the

Senior Independent Director, who gathered

performance feedback through separate meetings

with each of the Non-Executive Directors, with

supplementary views from the Executive Directors.

2023 BOARD PERFORMANCE REVIEW

The 2023 performance review was conducted

internally. The review extended to all aspects of

Board and Committee performance and the

process undertaken is explained below.

AREA OUTCOME AND ACTIONS

Continue to evolve the governance structure

to meet the evolving requirements of ESG

metrics and disclosures.

A schedule of sustainability updates was

agreed as part of the Board forward

agenda. The Company Secretary was

reviewing the role and responsibilities for

the Committees and this review would

cover where ESG issues were considered.

Talent reviews and succession planning for

senior management to continue to be

subject to regular review.

The Board agreed that this would continue

to be a regular item of discussion and

incorporated into the forward agenda.

Further updates and discussions took place

at the November 2023 Nominations

Committee meeting, with papers available

to the full Board, and further updates have

been scheduled.

Focus areas for the Board in the coming year

to include people and culture, customers,

investors.

Sufficient time for discussion on each

stakeholder group would be built into the

forward agenda, with updates from

relevant AMB member and further

stakeholder engagement opportunities

identified where appropriate.

Continue the interaction with management

and all employees to continue to build

understanding of the business and culture.

The Board agreed that a set of meetings

should be held at an easyJet holidays

destination, and other meetings should be

held elsewhere in the easyJet network to

provide opportunities to build relationships

amongst board members and continue

enhancing their knowledge and

understanding of the business.

FINDINGS AND ACTIONS

The performance review concluded that the Board continued to operate effectively, with the Board‘s

deliberations, number and length of meetings, information presented by management, and the

composition of the Board all rated positively. The changes made to the board forward agenda had been

received positively, and the informal and formal time spent with getting to know the business was also

viewed as an improvement.

The findings of the Chairman evaluation confirmed that Stephen Hester continued to be a successful

Chairman, with his chairmanship of Board meetings being effective, and he continued to devote

sufficient time to the role.

The key focus areas identified from the review are set out below.

PREPARATION

Questionnaires for the Board and its Committees were developed by the Company Secretary

in consultation with the Chairman and Senior Independent Director.

The questionnaires covered the following thematic areas:

Board

composition,

skills and diversity

Board

effectiveness

Link between

the Board and

business

Strategic

oversight

Culture

oversight

Information

flow

Individual

performance

Committee

strengths and

weaknesses

COMPLETION OF ONLINE QUESTIONNAIRES

Online questionnaires were distributed to each of the individual Board members for completion.

The questionnaires sought feedback on the areas set out above, covering both the Board

and its Committees.

COLLATION OF RESPONSES AND INDIVIDUAL DISCUSSIONS

Individual responses to the questionnaires were collated by the Company Secretary,

who prepared anonymised summaries. These anonymised summaries were discussed with the

Chairman and Senior Independent Director. The Company Secretary then summarised the main

areas of feedback, before preparing a summary of suggested actions that could be implemented

over the forthcoming year.

BOARD DISCUSSION

The findings of the performance review and proposed actions were discussed at the September

Board meeting. The feedback on the Chairman was discussed by the Non-Executive Directors

without the Chairman being present.

The Board agreed a number of actions in response to the review that would be implemented

and monitored over the forthcoming year.

easyJet plc

Annual Report and Accounts 2023

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Governance

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

KENTON JARVIS

Chief Financial Officer

JOHAN LUNDGREN

Chief Executive

Nationality: British

Appointed: September 2021 (Chairman from

December 2021)

Contribution to the Board

> Stephen is a strategic and successful leader with

more than 35 years of wide-ranging business

experience, including significant experience leading

major international businesses in regulated industries.

> He brings a strong track record of value creation

and listed company experience to the Board.

> As well as ensuring the Board operates

effectively, chairing Board meetings and

meetings of the Nominations Committee, he

regularly engages with management, employees

and investors to ensure their views are

represented in the Board’s deliberations.

Career and experience

Stephen served as a Chief Executive of RSA

Insurance Group plc from February 2014 to May

2021, and prior to this as Chief Executive of Royal

Bank of Scotland Group, Chief Executive of British

Land plc and Chief Operating Officer of Abbey

National plc, as well as holding a number of senior

executive roles at Credit Suisse First Boston in

London and New York. He has also held senior

non-executive positions as Deputy Chairman of

Northern Rock and Senior Independent Director of

Centrica plc. Stephen holds a BA (Hons) in Politics,

Philosophy and Economics from Oxford University.

Current external appointments

Lead Independent Director of Kyndryl Holdings,

Inc. and Chairman of Nordea Bank Abp.

Nationality: Swedish

Appointed: December 2017

Contribution to the Board

> Experienced leader who is strategic yet

operationally focused, having designed and

implemented a number of easyJet’s key

strategic initiatives since his appointment,

including the relaunch of easyJet holidays, our

Sustainability Strategy and our pathway to net

zero emissions, which demonstrates his desire

to lead the decarbonisation of aviation.

> Proven experience in European travel with more

than 30 years’ experience in the travel industry.

Career and experience

Prior to joining easyJet, Johan was the Group

Deputy Chief Executive Officer and Chief

Executive Officer of Mainstream Tourism at TUI

AG. He was the Managing Director for the

Northern Region at TUI Travel plc from 2007 until

2011. From 2003 until 2007, he was the Managing

Director and Chief Executive Officer of TUI Nordic.

Johan led MyTravel’s businesses out of Canada

and Sweden between 1999 and 2003, prior to

which he was Managing Director of Always Tour

Operations from 1996.

Current external appointments

Senior Advisor, Blackstone (private equity group).

Nationality: British

Appointed: February 2021

Contribution to the Board

> Brings extensive experience of the travel and

aviation sector to the Board having held senior

group and divisional finance roles at TUI and

Airtours Holidays.

Career and experience

Kenton was previously CEO of Aviation and

Business Improvement Director – Markets, at TUI

Group, having held a number of senior group and

divisional finance roles at TUI since 2003. Kenton

holds a BSc (Hons) in Biochemistry from the

University of Manchester. Before joining TUI,

Kenton was the Finance Director of Airtours

Holidays and held a number of commercial finance

roles at Adidas, prior to which he qualified as a

chartered accountant with PwC.

Current external appointments

None

STEPHEN HESTER

Chairman

Audit Committee

Nominations Committee

Safety & Operational Readiness Committee

Committee Chair

Finance Committee

Remuneration Committee

Board Committees key

BOARD OF

DIRECTORS’

BIOGRAPHIES

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ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

BOARD OF DIRECTORS’ BIOGRAPHIES (CONTINUED)

Nationality: British

Appointed: March 2023

Contribution to the Board

> Significant strategic and commercial experience

having served various executive and non-

executive roles which is valuable to easyJet in

driving long-term shareholder value.

> Liaises with Non-Executive Directors outside of

Board meetings and leads the performance

review of the Chairman.

Career and experience

Sue served as a member of the Executive

Management team at SABMiller plc from 2003,

serving as Director of Corporate Affairs until 2012

and then Managing Director, Europe until the

business was acquired in 2016. Prior to SABMiller,

she served as Director of Corporate Affairs for

Railtrack plc and Scottish Power plc.

Current external appointments

Senior Independent Director of Imperial Brands

PLC and an independent Non-Executive Director

of Mondi plc and Britvic plc.

Nationality: French and British

Appointed: January 2020

Contribution to the Board

> Extensive financial expertise gained across

senior finance roles in investment banking and

M&A over 33 years, along with an in-depth

understanding of corporate governance and

regulatory matters.

> Her experience in financial and capital markets makes

her ideally suited as Finance Committee Chair.

> Experienced in stakeholder engagement as

evidenced in her role as the Employee

Representative Director.

Career and experience

Catherine began her career with Merrill Lynch in the

US and finished the executive phase of her career as

Head of Advisory Global Markets with Societe

Generale in Asia. Catherine then served as a

Non-Executive Director of the UK Financial Conduct

Authority and Chair of its Audit Committee from

2014 to July 2020, and of WS Atkins plc from 2015

until its delisting in 2017. Catherine was also a

member of the Supervisory Board and Chair of the

Finance and Audit Committee of Peugeot S.A. from

2016 to 2021. Catherine graduated from HEC Paris

with a major in Finance and International Economics.

Current external appointments

Non-Executive Director of Johnson Electric

Holdings Limited and Chair of their Nomination and

Governance Committee, a Non-Executive Director

of abrdn plc and Chair of their Audit Committee,

and Senior Independent Director of Kingfisher plc.

Nationality: Dutch

Appointed: September 2022

Contribution to the Board

> In-depth airline and customer services

experience, along with a valuable European

perspective to Board deliberations.

> Experienced in stakeholder engagement as

evidenced in her role as the Employee

Representative Director.

Career and experience

Ryanne has extensive airline operations and

customer service experience, having more than 20

years’ experience with KLM, her last role being the

Chief Experience Officer. Her previous senior

executive appointments also include Chief

Operating Officer for Dubai Airports and Chief

Experience Officer for Ras Al Khaimah Economic

Zone in the UAE. She also served as Chief

Operating Officer of Mentaal Beter, an

organisation focused on mental healthcare in the

Netherlands.

Current external appointments

Chair of Advisory Board, Child Protection Research

Centre, UAE, and Member of the Supervisory

Board of Krasnapolsky Hotel and Restaurants N.V.

Nationality: German

Appointed: September 2022

Contribution to the Board

> Brings extensive travel and aviation sector

commercial experience as well as a deep

knowledge of digital and data driven businesses,

combined with a European outlook.

Career and experience

Harald brings significant experience of the travel

and aviation industry, having held senior executive

positions with Lufthansa and Sabre Travel

Network. He most recently served as Chief

Commercial Officer for Infare A/S, the leading

provider of competitor air travel data based in

Denmark, and later served as a member of the

Supervisory Board (2021 to 2023). He has

previously held senior positions with Deutsche

Telekom, eBay and Hoechst and served as a

Non-Executive Director of Groz-Beckert SE (2007

to 2021) and Ifolor AG (2013 to 2019).

Current external appointments

Member of the Advisory Board of Solytic GmbH.

SUE CLARK

Senior Independent Director

CATHERINE BRADLEY CBE

Non-Executive Director

RYANNE VAN DER EIJK

Non-Executive Director

HARALD EISENÄCHER

Non-Executive Director

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ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

BOARD OF DIRECTORS’ BIOGRAPHIES (CONTINUED)

Nationality: British

Appointed: August 2020

Contribution to the Board

> Experienced non-executive who brings

extensive legal and corporate finance

experience to the Board.

> Deep knowledge of executive remuneration as

an experienced Remuneration Committee Chair

means she is well placed as Chair of the

Remuneration Committee.

> Experienced in stakeholder engagement as

evidenced in her role as the Employee

Representative Director.

Career and experience

From 2000 until 2016, Moni was a Partner and Head of

the International Banking and Finance Division of

Olswang LLP, before which she held senior positions

with Dewey & LeBoeuf LLP, Simmons & Simmons and

Clifford Chance LLP. Until 2017, Moni was Chief

Operating Officer of Aistemos Limited. Moni has also

held a number of non-executive positions, including as

a Board member of the Solicitors Regulation Authority

(chairing its Equality, Diversity and Inclusion Committee)

and at Cranfield University. Moni has also served as a

Non-Executive Director of Polypipe Group plc (2014 to

2019), Dairy Crest Group plc (2017 until their acquisition

and delisting in 2019), Breedon Group plc (2019 to 2021)

and Investec Bank plc (2016 to 2023), and Deputy

Chair of the charity Barnardo’s (2017 to 2022).

Current external appointments

Independent Non-Executive Director of Hargreaves

Lansdown plc, Non-Executive Director and Chair of

the Remuneration Committee of Cazoo Group Ltd,

and Member of the Takeover Panel.

Nationality: British

Appointed: November 2020

Contribution to the Board

> Brings strong financial, risk management and

corporate finance experience to the Board and

Audit Committee as Chair.

> His international and strategic outlook,

combined with over 20 years serving as a

Director on FTSE Boards, provides a valuable

perspective in Board and Committee

discussions.

Career and experience

David was Finance Director of Rexam plc from

2005 until 2016. Prior to his role at Rexam, David

served in senior finance roles at Invensys plc

before becoming Group Finance Director at CMG

plc in 2000 and then Chief Financial Officer at

Royal P&O Nedlloyd N.V. in 2004. He served as

interim Chairman, Senior Independent Director and

Chair of the Audit Committee of FirstGroup plc

from 2018 to 2021, and Non-Executive Director

and Chair of the Audit Committee for the BBC

between 2006 and 2010. David qualified as a

chartered accountant at KPMG and holds an MA

in English Literature from St. Andrew’s University.

Current external appointments

Senior Independent Director and Chair of the

Audit Committee at DS Smith plc.

Nationality: German

Appointed: September 2022

Contribution to the Board

> Brings recent and in-depth experience of global

logistics and commercial strategy, along with a

European outlook.

> Broad experience of technology enabled and

data supported business transformation.

Career and experience

Detlef brings more than 30 years’ experience

leading global transport and logistics companies.

Detlef served as Chief Executive of Kuehne +

Nagel International AG, from 2013 to 2022. During

his tenure, he led the company through an

important period of growth, transformation and

consolidation, doubling revenue and quadrupling

profit to become the largest third-party transport

and logistics provider in the world. Prior to Kuehne

+ Nagel, he spent 15 years with DB Schenker in

various senior executive positions, including EVP of

Global Contract Logistics & Supply Chain

Management, having started his career at Siemens

AG and Roland Berger.

Current external appointments

Non-Executive Director of Accelleron Industries

AG, SATS Ltd and PSA International.

Changes to the Board during the year

and up to 28 November 2023

> Julie Southern and Dr Andreas Bierwirth

stepped down on 9 February 2023.

> Sue Clark was appointed with effect

from 1 March 2023.

MONI MANNINGS

Non-Executive Director

DAVID ROBBIE

Non-Executive Director

DR DETLEF TREFZGER

Non-Executive Director

Career and experience

Ben joined easyJet in July 2019 as Deputy

Company Secretary and became Group Company

Secretary on 1 January 2023. He is a Fellow of the

Chartered Governance Institute and has over 20

years’ experience working for leading UK listed

brands including ITV, Burberry and Sky.

BEN MATTHEWS

Company Secretary

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Governance

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

Nationality: American

Areas of expertise: Customer and marketing

Career and experience

Robert joined the AMB in August 2022. Robert is

a highly experienced consumer marketing and

general management leader with a track record

of driving growth, building brands and leading

winning teams across ecommerce, travel, online

apparel, wireless and consumer goods for both

large companies and start-ups. Before joining

easyJet, Robert was Chief Growth Officer at ASOS

in a role that encompassed marketing, end-to-end

customer experience, data insight and media

publishing, increasing revenue growth from 13% in

2019 to 21% in 2021. Previously Robert spent six

years as CMO at KAYAK, establishing it as a leader

in the travel industry, leading to public listing. He

was also part of the original start-up team that

created US online travel agency Orbitz.

See Board of Directors profile. See Board of Directors profile.

ROBERT BIRGE

Chief Customer & Marketing Officer

AIRLINE

MANAGEMENT

BOARD

BIOGRAPHIES

KENTON JARVIS

Chief Financial Officer

JOHAN LUNDGREN

Chief Executive

Read more on page 89 Read more on page 89

easyJet plc

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Strategic report Financials

Governance

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

AIRLINE MANAGEMENT BOARD BIOGRAPHIES (CONTINUED)

THOMAS HAAGENSEN

Group Markets Director

Nationality: British

Areas of expertise: Legal

Career and experience

Rebecca joined the AMB in January 2023 on her

appointment as Group General Counsel. Rebecca

has over 20 years’ experience as a lawyer, having

started her career at Herbert Smith Freehills,

where she specialised in IP, technology and media

law and disputes. She joined easyJet in 2010 as a

senior commercial lawyer and has progressed her

career through a variety of roles, before taking on

responsibility for the management of the legal and

claims teams in 2018. From 2019 to 2023, she led

these teams in the role of Deputy General Counsel

and was at the heart of easyJet’s response to, and

emergence from, the pandemic. Rebecca has also

been the Legal Director of easyJet holidays since it

was established in 2019. Rebecca’s sharp

commercial skills, combined with her deep

understanding of the airline and holidays

businesses, give her a unique and powerful

perspective.

Nationality: Danish

Areas of expertise: Commercial and operations

management

Career and experience

Thomas became a member of the AMB in May

2018. Thomas has over 20 years’ experience in

operations management built in a variety of roles

across Europe. Danish born and educated in

Switzerland, Thomas began his career with Tetra

Pak, working his way up to Regional Manager of

the East Med where he developed and succeeded

in implementing ambitious growth and profitability

improvement plans. Since joining easyJet in 2008

Thomas has significantly grown the Swiss market,

developed easyJet’s market entry strategy for

Germany and developed the business traveller

segment in Northern Europe. Most recently he was

appointed Managing Director of easyJet Europe,

establishing the Company’s Austrian AOC, a key

part of its Brexit migration plan, and managed the

transition of 100 aircraft to easyJet Europe.

REBECCA MILLS

Group General Counsel

SOPHIE DEKKERS

Chief Commercial Officer

STUART BIRRELL

Chief Data & Information Officer

Nationality: British

Areas of expertise: Data and information

technology

Career and experience

Stuart joined the AMB in November 2020. Before

joining easyJet, Stuart spent five years as Director

and Chief Information Officer at Heathrow Airport

Ltd. He previously held the role of CIO at Formula

1’s McLaren Technology Group where he worked in

the high-performance environment, building a

team of in-house experts and specialist suppliers.

Prior to that, he spent three years at Gatwick

Airport where he successfully separated the

airport systems from BAA and brought

improvements to complex IT foundations and

transformation processes. Stuart brings with him

significant experience and expertise in IT security,

cloud-based solutions, big data sets and

technology to support business expansion.

Nationality: British

Areas of expertise: Aviation and strategy

Career and experience

Sophie joined the AMB in December 2020. She

had previously been easyJet’s Customer Director.

Prior to this, she was Director of Scheduling for the

airline, implementing systems and process

improvements. She has also led easyJet in the UK

as Country Director for five years, responsible for

driving the airline’s commercial success and

strategic direction in the UK as well as representing

aviation at both House of Lords and House of

Commons select committees. Previous roles in the

airline include Head of Change Management and

Customer Insight, and she has a background in

customer insight, working with a range of brands

from Jaguar Land Rover to Mars, Unilever and

Vodafone. Sophie was also Non-Executive Director

for Airport Coordination Limited from 2017 to 2021

and sat on their Remuneration and Nomination

Committees. Sophie is easyJet’s AMB lead on

diversity, equity and inclusion, a qualified MindGym

coach, business mentor, and was a founding

member of easyJet’s Women’s Network.

easyJet plc

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Strategic report Financials

Governance

ENSURING EFFECTIVE GOVERNANCE (CONTINUED)

AIRLINE MANAGEMENT BOARD BIOGRAPHIES (CONTINUED)

Changes to the Airline Management Board

during the year and up to 28 November

2023

> Rebecca Mills was appointed Group General

Counsel on 1 January 2023, replacing

Maaike de Bie.

> Jane Storm was appointed Group People

Director on 1 March 2023, replacing Ella

Bennett.

Nationality: British

Areas of expertise: Travel, business transformation

and global markets

Career and experience

Garry joined the AMB in 2018 and has over 25 years

experience in the travel sector. He has successfully

developed significant business growth strategies

across several international markets and has built

and led large global teams throughout his career.

Garry has worked extensively with overseas

governments and emerging economies to create

sustainable tourism policies, whilst promoting major

economic growth and positive social change. He is

an AMB sponsor for diversity, equity and inclusion,

and health and well-being. He has held Board

positions in the Travel Foundation and Travelife and

was appointed to the board of ABTA in 2021.

GARRY WILSON

CEO, easyJet holidays

JANE STORM

Group People Director

DAVID MORGAN

Chief Operating Officer

Nationality: British

Areas of expertise: Flight operations

Career and experience

David joined the AMB in July 2022, having joined

easyJet in September 2016 as the airline’s Chief

Pilot, and in December 2017 took up the position

of Director of Flight Operations, taking

responsibility for the safe and efficient operation

of the airline’s flights across Europe. David

previously served as interim COO in 2019, when

he oversaw operations across the airline and

delivered significant improvements in operational

performance. David and his operations team focus

on safe, efficient and sustainable operations in an

increasingly complex and challenging environment.

Prior to joining the airline, David was Chief Flight

Operations Officer at Wizz Air. His long career in

aviation has taken him around the world including

Australia and the Middle East.

Nationality: British

Areas of expertise: People and culture

Career and experience

Jane joined the AMB in March 2023. Jane is a

highly experienced strategic HR Director with a

track record of driving positive and inclusive

cultural change, alongside accelerating leadership

and operational capability. She has specialist HR,

operational and change leadership experience

across travel, digital, media, retail, logistics and

financial services. Before joining easyJet, Jane was

the Chief People Officer at Saga Plc. She was

previously a Senior HR Director at Tesco plc, with

19 years’ experience driving people strategies

across UK, European and Asian markets, as well as

strategically leading organisation design, talent

and learning at a Group level.

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Annual Report and Accounts 2023

Strategic report Financials

Governance

ENGAGING WITH STAKEHOLDERS

As set out in the Corporate Governance Code, the

Board recognises the importance of identifying its

key stakeholders and understanding their

perspectives. They are a fundamental part of our

operations and are referenced throughout this

report. We have set out on the following pages

details of who our key stakeholders are, how we

have engaged with them and the associated

outcomes, and included some examples of

stakeholders being considered in strategic

decisions. Further details are contained in the

summary of the Board’s activity in the year on

pages 74 to 77.

As set out on pages 51 to 53, there was extensive

engagement around our sustainability activities in

the year with our people, customers, policymakers,

suppliers and industry peers. We have not

repeated these below but incorporate by

reference.

HOW WE ENGAGE AND INFORMATION FLOWS

> Customer communications, including emails,

our app, call centres, our self-service disruption

management tool, our corporate website, our

dedicated sustainability website and on social

media.

> easyJet Customer Community, who share

experiences and help test messaging, policies,

products and propositions via polls, discussions,

forums, video diaries and surveys.

> Regular customer surveys to find out about

customers’ travel experiences.

> Crew feedback sessions via management

and online forums.

> Customer sentiment and satisfaction (CSAT) is

regularly discussed by the Airline Management

Board (AMB) and the Board.

> We measure our performance through our

customer satisfaction KPI (see page 17) which

is reported to the Board monthly.

CONSIDERATIONS AND OUTCOMES

The Board reviewed easyJet’s customer strategy

and priority to deliver ease and reliability during

the year. From discussing feedback received

from customers, the Board requested that

further work be undertaken on customer

communications during times of disruption.

The Board visit to the Integrated Control

Centre helped members to understand

on-the-day factors and how this impacts

the customer experience, including identifying

opportunities to deploy AI and other technologies

to improve operational efficiencies.

The Board received operational updates

from David Morgan, Chief Operating Officer at

each Board meeting on winter 2022 and summer

2023 operational readiness, challenges around

disruption and initiatives undertaken to minimise

disruption. In addition, they also received regular

weekly updates on trends and metrics on

operational performance, customer satisfaction,

flying schedule, and crew training. This allowed

the Board to have an oversight of easyJet’s

operational performance.

Customer satisfaction was regularly discussed by

the Board including through updates received as

part of CEO reports.

A key part of our strategy is a focus on the

customer, both to win our customers’ loyalty

and to achieve our purpose of making

low-cost travel easy.

Customers have increased choice, and their

expectations are rising. Ensuring we meet their

evolving needs will position us as the brand of

choice when flying within Europe.

Our understanding of who our current and

potential customers are, how they perceive

easyJet and what products they need, enables

us to prioritise our efforts towards delivering a

positive customer experience and loyalty.

KEY FOCUS

> Safety

> Product choice and value

> Ease of making and managing bookings

> Ease of travelling and minimising disruption

> Sustainability

OUR CUSTOMERS

Read more on page 9

UNDERSTANDING

STAKEHOLDER

PERSPECTIVES

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ENGAGING WITH STAKEHOLDERS (CONTINUED)

HOW WE ENGAGE AND INFORMATION FLOWS

> Employee Representative Directors’ meetings.

> Base visits and informal interaction with crew.

> Updates from the CEO and Group People

Director on people strategy and other matters.

> Hosting events such as breakfasts with senior

leaders in order to get to know the

management layer below the AMB.

> Your Voice Matters employee surveys are

discussed by the AMB and Board.

> Engagement with employee representative

groups, pilot and cabin crew unions.

> Regular internal communications.

> Participation in the Group’s performance

through employee share schemes.

> Monitoring of themes and trends arising from

the ‘Speak Up, Speak Out’ (SUSO) mechanism.

CONSIDERATIONS AND OUTCOMES

The Board received regular updates from our

Employee Representative Directors to ensure

employee voice was reflected when taking strategic

decisions, including during the fleet discussions

during the year. This included feedback from

meetings with the Portfolio Change team, the

Operations Leadership team, pilot representatives

and Cabin Services team.

The Board and its Committees have considered

this feedback during its deliberations in the year,

including when reviewing SUSO whistleblowing

cases, wellbeing and matters such as the gender

pay gap during the year.

The Your Voice Matters survey was discussed by

the Board to understand employee behaviours

and expectations.

HOW WE ENGAGE AND INFORMATION FLOWS

> Meetings between AMB members and senior

executives of major suppliers on a regular basis

to understand the strategy and health of their

businesses.

> The Board looks to engage with key suppliers

whenever appropriate.

> Discussion at Audit Committee and Board

with central procurement function on supplier

management.

CONSIDERATIONS AND OUTCOMES

We have a number of key suppliers, including

aircraft and engine suppliers, ground handling and

logistics, critical technology suppliers, fuel

providers, engineering and maintenance providers,

aircraft lessors and hoteliers for easyJet holidays.

The Board has engaged with the organisations

operating key airports during the year, such as

Milan and Gatwick (see pages 76 and 77).

We continue to engage with our suppliers to

improve resilience and performance.

During the year the Board considered the

longer-term fleet plan and following a robust

procurement process, entered into an agreement

with Airbus for the purchase of new aircraft.

Further details are set out on page 99.

Our people are a critical part of our business

and we want to create an inclusive culture

where people can be their best, feel that they

truly belong and live the ‘Orange Spirit’.

Engaging effectively with them is key to doing

this successfully. More information our people

and our approach to Inclusion and Diversity

can be found on page 36.

easyJet’s suppliers have an important role in

delivering our ambition, and we strive to

ensure that they have aligned views on

corporate responsibility and compliance.

We partner with key suppliers to deliver many of

our operational and commercial activities. Our

partners are carefully selected, and significant

emphasis is placed on managing these

relationships, with the aim of encouraging

incremental innovation and performance.

KEY FOCUS

> Health, safety and working conditions

> Wellbeing and mental health

> Training and career development

> Inclusion and Diversity

> Reward and benefits

KEY FOCUS

> Compliance with regulations

> Health and safety

> Treatment of suppliers

> Sustainability

> Payment practices

OUR PEOPLE

OUR SUPPLIERS

Read more on page 11

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ENGAGING WITH STAKEHOLDERS (CONTINUED)

HOW WE ENGAGE AND INFORMATION FLOWS

> The Board actively seeks engagement with

investors and major institutional shareholders

and shareholder representative bodies.

> The CEO and CFO, together with members of

the AMB, engage with shareholders on financial

and business performance and strategic

priorities regularly, particularly around results

announcements, and the Chairman and

Company Secretary engage with shareholders

as required to understand their views on

corporate governance and strategy.

> The Chairman, CEO and CFO update the Board

regularly and the views of shareholders.

> The Committee Chairs also make themselves

available for engagement with major

shareholders.

> There is also engagement with the brokers

and other advisers.

CONSIDERATIONS AND OUTCOMES

Engagement took place in advance of the AGM

on the resolutions being proposed, including by

the Chair of the Remuneration Committee.

Engagement also took place following the AGM,

to understand where investor policies differed

from the Company’s approach and where any

steps could be taken to address these gaps, for

example around share capital authorities. These

views will be considered when finalising the

business for the next AGM.

Shareholders and investors are the main

providers of capital with which to invest and

grow the Group’s business. Understanding the

views of our shareholders, and acting fairly

between them, remains a key priority.

Taking account of their views on the

Company’s operational and financial

performance and its strategic direction

is also an important part of ensuring we

deliver strong shareholder value.

KEY FOCUS

> Operational and financial performance

> Creation of long-term sustainable

shareholder value, including addressing

environmental, social and governance

matters

> Share price and dividend returns

OUR SHAREHOLDERS AND INVESTORS

Annual General Meeting

Shareholders are encouraged to participate

in the AGM either in person or remotely and

communicate directly with the Board.

Shareholders are given the opportunity to

raise issues formally at the AGM or informally

with Directors after the meeting. All Directors

attend the AGM where possible and the Chairs

of the Committees are available to answer

questions. The Company’s 2023 AGM was held

on 9 February 2023, and shareholders had the

opportunity to ask questions in advance of the

meeting or during the meeting, in person and

electronically.

Notice of the Company’s next AGM, comprising

a letter from the Chairman, Notice of Meeting

and explanatory notes on the resolutions

proposed, will be issued separately at the

appropriate time and will also be published

on easyJet’s corporate website at

corporate.easyJet.com.

ENGAGEMENT DURING THE YEAR

The Investor Relations team and Company

Secretary proactively engage with

investors throughout the year through an

annual programme of activity summarised

below, alongside communication with

market analysts and the Company’s

brokers, and attending regular investor

conferences with the CEO or CFO.

> Trading update for the year ended

30 September 2022

> Full-year results

> Road shows with UK, European and

US investors with management

> Trading update for six months ended

31 March 2023

> Half-year results

> Road shows with UK, European and

US investors with management

> easyJet holidays seminar

> First quarter trading update and

discussion with investors and

advisory bodies ahead of AGM

> Operations and customer seminar

> Third quarter trading update

> Annual General Meeting

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Governance

ENGAGING WITH STAKEHOLDERS (CONTINUED)

HOW WE ENGAGE AND INFORMATION FLOWS

> Country managers lead the community

engagement in their markets, and base

managers also engage directly with their local

airport communities.

> Partnerships with individual airports and air

traffic control teams to implement reduction

in cabin waste and noise mitigation activities

that seek to minimise the impact on local

communities.

> Employee volunteering with local charities

and organisations.

> This year we undertook a double materiality

assessment, where we gathered 841

stakeholder perspectives through surveys,

interviews and focus groups.

CONSIDERATIONS AND OUTCOMES

We offer support for employees to volunteer in

their local communities, such as flexible working

and time off.

This summer, to help support the emergency

response following the natural disasters in

Morocco and Libya, we launched an emergency

collection on board to support UNICEF’s

Children’s Emergency Fund.

As set out in the stakeholder example on page

99, the Proposed Aircraft Purchase will allow

easyJet to bring newer, more fuel efficient and

quieter aircraft into its fleet, benefiting

communities.

HOW WE ENGAGE AND INFORMATION FLOWS

> AMB members and other senior management

engage with members of government and

regulatory bodies.

> Country managers and directors engage with

governments in all markets where we have

bases, at both a national and regional level.

> Discussions with operations and safety

regulators such as Austro Control (Austria), the

Civil Aviation Authority (UK), the Federal Office

of Civil Aviation (Switzerland) and EASA, among

others.

> Discussions with air traffic control operators

such as NATS.

> Participation in trade associations such as A4E

and Airlines UK, and tourism bodies, such as

ABTA and the GSTC.

> We also participate in industry groups that

contribute to public policy development on

sustainability issues, such as the Aerospace

Technology Institute, the Aviation Council,

Airlines UK, the Jet Zero Council (UK

Government), the Science Based Targets

initiative and Sustainable Aviation (UK).

CONSIDERATIONS AND OUTCOMES

Meetings with various governments resulted

in confirmation of our commitment to various

markets in our network and discussed some

of the key challenges and opportunities.

Discussed the EU’s ‘Fit for 55’ climate legislation

package and how to stimulate the technological

innovation that will be needed for zero emission

aviation, including through the EU’s Alliance for

Zero-Emission Aviation.

Shared our net zero roadmap with minsters in the

UK and Europe, and how governments can

support decarbonisation of the sector.

Our COO attended the Transport Select

Committee on travel disruption and the NATS IT

issue to provide an overview of the issues faced

by the industry as well as provided

recommendations aligned with our regulatory

priorities.

Submitted a response to the UK Budget

highlighting the need for greater support on

hydrogen, air passenger duty reforms.

We want to make a positive impact and we

value our relationships with the communities

where our employees and customers live and

operations are based, as they are important to

the effective operation of our business.

Regulators and governments take decisions

which directly impact our operations. easyJet

engages with them to understand their

strategic drivers and the impact of any

regulatory changes on the Company and

customers, and to ensure that policymakers

understand our business and the social and

economic benefits it delivers.

KEY FOCUS

> Local employment and social mobility

> Sustainability, including carbon and other

aircraft emissions; aircraft noise; energy

usage; recycling and waste

> Charitable activity

KEY FOCUS

> Compliance with regulations

> Health and safety

> Treatment of suppliers

> Sustainability

> Payment practices

OUR COMMUNITIES

REGULATORS AND GOVERNMENTS

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STAKEHOLDERS IN DECISION MAKING

sustainability-

linked term loan

Proposed

Aircraft purchase

Decision

Refinancing the existing term loan facility and

linking to sustainability metrics.

Background

In January 2021, the Company entered into a

five-year $1.87 billion loan facility with 10 banks

and supported by 80% guarantee from UK

Export Finance (the UKEF Facility). Management

determined that the Company should look to

refinance this facility in order to reduce gross

debt and interest rate costs. Given easyJet was

the first low-cost carrier in Europe to have CO

intensity targets validated by the SBTi,

management decided to consider the inclusion

of sustainability metrics into the term of the new

facility into the new UKEF Facility.

Stakeholders

Community, Investors, Suppliers

Strategic priorities

Driving our low-cost model

Delivering ease and reliability

Links to strategy and purpose

Sustainability is a key element of easyJet strategy.

We are focused on reducing the carbon intensity of

our flying and as a result in September 2022, we

launched our SBTi-aligned net zero roadmap.

Decision

Aircraft purchase and conversion – purchase of

157 Airbus aircraft (56 A320neo and 101 A321neo)

between FY29 and FY34, purchase rights for a

further 100, and conversion of 35 A320neo

aircraft currently on order to A321neo aircraft, for

delivery between FY26 and FY28 (the Proposed

Aircraft Purchase).

Background

easyJet already had 69 A320neo aircraft within

its fleet and an existing order book with Airbus

to FY29 for a further 158. The Proposed Aircraft

Purchase provides easyJet with the ability to

address its fleet requirements beyond FY28,

including the completion of the fleet

replacement programme of A319 aircraft and

replace approximately half of the A320ceo

aircraft, alongside providing the foundation for

disciplined growth.

Stakeholders

Community, Customers, Investors

Strategic priority:

Building Europe’s best network

Links to strategy and purpose

The Proposed Aircraft Purchase would allow

easyJet to invest in its network and deliver the

growth ambitions set out in the strategic

priorities, and provide a cost-competitive fleet,

which is a key component of easyJet’s low-cost

business model. It was also aligned with easyJet’s

sustainability strategy as the adoption of new

and more efficient aircraft is a core component

of the path to net zero emissions.

Stakeholder and s172 considerations

The Board considered that the term loan facility

was likely to promote the success of the

Company in the long term, as by repaying the

amount outstanding on the previous facility and

reducing the interest rates on the new facility,

this would reduce financing costs. This would be

beneficial to shareholders by increasing financial

efficiency.

easyJet worked with 11 key banking relationships

on this financing and took account of the

Company’s impact on communities and the

environment by incentivising easyJet to deliver

on its net zero roadmap through the inclusion of

the sustainability metrics.

Outcome

The Company signed a new undrawn five-year

sustainability-linked term loan of $1.75 billion

underwritten by a syndicate of banks and

supported by a partial guarantee from UKEF

under their Export Development Guarantee

scheme. The terms of the loan are linked to a

reduction in carbon emission intensity in line with

the Company’s SBTi-validated target, with a

margin adjustment mechanism (upward or

downward) conditional to the achievement of

specific milestones.

Stakeholder and s172 considerations

The Board considered that the Proposed Aircraft

Purchase was likely to promote the success of

the Company in the long term, as it would

provide security in the Company’s aircraft supply

and therefore help easyJet sustain its route

network, maintain desirable airport slots and

continue to grow. The Proposed Aircraft

Purchase would also improve the Company’s

impact on communities and the environment, as

the new aircraft would continue the

modernisation of the easyJet fleet, delivering

fuel efficiencies, and carbon emissions and noise

footprint reductions. Not only would the fuel

efficiencies and carbon emission reductions

benefit the environment, it would also provide

economic advantages, which would benefit

easyJet’s customers and investors.

Outcome

As the Proposed Aircraft Purchase would

constitute a Class 1 transaction it will require

shareholder approval at a general meeting to be

held by the end of 2023. Ahead of the general

meeting, the Company will consult major

shareholders to discuss the transaction, and all

shareholders will be able to submit questions in

advance of, and during, the general meeting.

ENGAGING WITH STAKEHOLDERS (CONTINUED)

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COMMITTEE REPORTS

I am pleased to present an overview of the

Nominations Committee’s activities during the

year. The main purpose of the Committee is to

ensure plans are in place for orderly succession

of Board and senior management positions while

maintaining an appropriate balance of skills,

experience, independence and diversity. The

Committee regularly reviews the structure, size

and composition of the Board and makes

recommendation to the Board with regard to

any changes.

During the year, the Committee led the process

to identify a new Senior Independent Director and

reviewed the Company’s talent and succession

plans for the Board and senior management,

along with our talent development and retention

strategies.

Inclusion and Diversity continue to be a key priority

for the Board. The Committee was updated on the

developments made in this area, including updates

to the Company’s structure and framework on

Inclusion and Diversity, as well as measurable goals

on gender representation across the organisation.

The Committee undertook a performance review of

the Board and its Committees as part of the 2023

Board Performance Review, details of which are set

out on in the governance report on page 88.

Further details of the Committee’s activities during

the year are set out in this report.

Stephen Hester

Chair of the Nominations Committee

NOMINATIONS

COMMITTEE

REPORT

Members

Stephen Hester (Chair)

Catherine Bradley CBE

Sue Clark

from 1 March 2023

Moni Mannings

David Robbie

from 9 February 2023

Julie Southern

until 9 February 2023

Dr Detlef Trefzger

from 9 February 2023

The Committee consists of the Chair of the

Board and the Independent Non-Executive

Directors listed above right. All members of the

Committee are Independent Non-Executive

Directors. Member biographies can be found

on pages 89 to 91.

The Chair of the Board acts as Chair of

the Committee with members of the executive

management invited to attend meetings.

The Company Secretary acts as Secretary

to the Committee.

The Committee met three times in the year and

meeting attendance can be found on page 83.

KEY ACTIVITIES DURING THE YEAR

Senior Independent Director appointment

The Committee is responsible for the orderly

succession of both the Board and senior

management positions and oversees the

development of a diverse pipeline for succession.

It is also responsible for maintaining a formal,

rigorous and transparent procedure for Board

appointments based on merit and objective

criteria. As part of this responsibility, the

Committee identifies and nominates candidates

for approval by the Board. The Committee also

considers the succession plans for the Board as

well as senior management below Board level.

Following the announcement in August 2022 that

Julie Southern would not be seeking re-election at

the AGM in February 2023 due to her appointment

as Chair Designate of RWS Holdings plc, the

Committee led the process to identify Julie’s

successor as Senior Independent Director. The

Committee reviewed the current composition of

the Board and the skills and experience it sought

in the new Senior Independent Director. The

Committee engaged search consultants Russell

Reynolds Associates (RR) to help define the role

profile and identify suitable candidates. RR are

signatories to the Enhanced Code of Conduct for

Executive Search Firms. They do not have any

other connection with the Company nor individual

Directors, except where they may have liaised with

them as prospective candidates for other Board

positions.

A range of candidates were considered for the

role, keeping in mind the skill and experience

required on the Board, as well as the need to

maintain gender diversity on the Board. Three

candidates were shortlisted for the role and

following an interview process involving the Chair,

Nominations Committee members, the Company

Secretary and Group People Director, Sue Clark

was identified as the recommended candidate for

Board approval.

The recruitment process is set out on the following

page, and Sue Clark’s biography can be found on

page 90. Details of her induction programme can

be found on page 85.

The Committee’s terms of reference can

be found on the Company’s website at

corporate.easyJet.com

SENIOR INDEPENDENT DIRECTOR

APPOINTMENT PROCESS

> Independent search consultants RR

engaged to develop a role profile and

identify suitable candidates for a longlist.

> RR compiled a longlist of candidates for

review.

> The Committee discussed the longlist and

considered the balance of skills, knowledge,

independence, diversity and experience of

the Board, together with an assessment of

the time commitment expected, and

created a shortlist.

> Interviews were held between three

shortlisted candidates and the Committee

Chair, Committee members, the Company

Secretary and Group People Director.

> Following completion of the interviews, the

Committee discussed the shortlisted

candidates and recommended that Sue

Clark be appointed as Senior Independent

Director given her experience in executive

and non-executive roles in large

international organisations.

> The appointment was recommended to,

and approved by, the Board.

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COMMITTEE REPORTS (CONTINUED)

NOMINATIONS COMMITTEE REPORT (CONTINUED)

Committee membership

Following the changes to the Board during the

year, the Committee reviewed the membership of

the Committees to ensure they continued to have

an appropriate combination of skills, experience

and knowledge. As a result, the Committee

recommended a number of changes to the

membership of Board Committees to the Board,

which were approved:

> David Robbie succeeded Julie Southern as Chair

of the Audit Committee in February 2023.

> Dr Detlef Trefzger succeeded Dr Andreas

Bierwirth as Chair of the Safety & Operational

Readiness Committee in February 2023.

> David Robbie and Dr Detlef Trefzger became

members of the Nominations Committee in

February 2023.

> Sue Clark became a member of the Audit,

Nominations and Safety & Operational

Readiness Committees on joining the Board

inMarch 2023.

Talent and succession planning

The Board continues to review plans for the

orderly succession of appointments to the Board

so that the right balance of appropriate skills and

experience is represented, building on the work

previously undertaken. During the year, the

Committee reviewed the balance of skills,

experience, diversity and independence of Board

members to ensure appropriate succession plans

were in place.

The Committee also recognises that building a

broader talent pipeline for executive succession,

the AMB and the Executive Leadership Team (ELT)

is a key priority to lead the growth of easyJet’s

business. During the year, the Committee reviewed

the Group’s senior management talent pipeline,

their development and succession plans, as well as

progress against the talent and development

framework.

As part of the succession planning process, the

Committee has visibility of written succession

plans, including details of emergency successors

and those identified as short and medium-term

successors, and reviews the development

programme for these individuals to understand

their strengths and skill gaps.

During the year, the Board engaged with AMB

and ELT members through formal presentations

at Board meetings, informal breakfasts and

dinners. This provided the Board and Committee

an opportunity to get to know individuals identified

in the succession plans.

Election and re-election of Directors

In line with the provisions of the Code and the

Company’s Articles, each Director is required

to seek election or re-election annually at the

Company’s AGM. The individual contribution,

effectiveness and time commitment of each of

the Non-Executive Directors is reviewed annually

as part of the Board Performance Review.

The Committee is mindful of differing policies and

guidelines amongst shareholders and proxy

advisers on the number of appointments the

Directors should hold. However when reviewing the

contribution of individual Directors, the Board

reviews their attendance, their availability to attend

ad hoc meetings and their contribution outside of

meetings. Following this review, the Committee has

satisfied itself as to the individual skills, relevant

experience, contributions and time commitment of

all the Non-Executive Directors, taking into account

their other external appointments and interests

held, remains appropriate.

The Board is therefore recommending the election

or re-election of all Directors at this year’s AGM.

Details of the service agreements for the

Executive Directors and letters of appointment for

the Non-Executive Directors, and their availability

for inspection, are set out in the Directors’

Remuneration Report on page 127.

Inclusion and diversity

The Committee and Board are committed to

ensuring that together the Directors possess the

requisite diversity of skills, experience, knowledge

and perspectives to support the long-term

success of the Company. In this regard, the role

ofdiversity in promoting balanced and considered

decision making which aligns with the Group’s

purpose, values and strategy is fully recognised.

AllBoard appointments are made on an objective

and shared understanding of merit, in line with

required competencies relevant to the Company

as identified by the Committee, and consistent

with the Inclusion and Diversity Policy.

There was a short period without a Senior

Independent Director between 9 February 2023

and 1 March 2023. During this period, there were

no Board meetings or any matters requiring the

attention or input of the Senior Independent

Director.

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COMMITTEE REPORTS (CONTINUED)

NOMINATIONS COMMITTEE REPORT (CONTINUED)

During the year, the Committee reviewed the

Company’s wider strategic approach on inclusion

and diversity as well as measurable goals on

gender representation across the Company.

The Company has met the FTSE Women Leaders

target of having 40% women on Boards (2023:

40%) and is targeting having 40% women in the

Airline Management Board (Executive Committee)

and their direct reports by 2025 (2023: 30%).

As at 30 September 2023, the Company has also

met the following FCA Diversity Targets (as

required by Listing Rule 9.8.6):

> at least 40% of the Board being women

(2023: 40%)

> at least one of the senior Board positions being

held by a woman (2023: Senior Independent

Director)

> at least one member of the Board being from

an ethnic minority background (2023: one).

The Company will set a target for ethnic minority

representation in senior management (AMB and

their direct reports) as required by the Parker

Review and disclose this in the next Annual Report.

The data required by Listing Rule 9.8.6 for the

Board of Directors and executive management as

at 30 September 2023, is set out on page 132.

The Nominations Committee also oversees the

development of a diverse pipeline for future

succession to Board and senior management

appointments, including reviewing the gender

balance of senior management and its direct

reports. Where there is a known desire to improve

diversity at a certain level or in a certain function

in the organisation, the recruiting team will ask to

see a higher proportion of candidates fitting the

diversity criteria. However, the final selection will

always be on merit.

Board Performance Review

During the year, the Committee undertook an

internal performance review of the Board, its

Committees, the Chairman and individual

Directors. Further details can be found on

page 88.

INCLUSION AND DIVERSITY

Our people are critical to our success, and as set out on

pages 35 to 38 we want to create an inclusive culture where our

people can feel they belong and be at their best. This

extends to the Board and its Committees and is

managed through the Board Diversity Policy.

Policy principles Implementation and progress Outcome

Appropriately review all

aspects of diversity in

relation to Board and

Committee composition.

See page 84 The Board and Committee meet FCA

diversity targets, with 40% female, one

member from an ethnic minority, and

the role of Senior Independent Director

held by a woman.

Review diversity of the

Board on an annual basis as

part of the Board

Performance Review.

See page 88 This has been reviewed during the

year, including as part of the Senior

Independent Director appointment

process and Board Performance

Review.

New appointments to

the Board will be made on

merit, in the context of the

requirements of the Board

at that time.

See page 84 All appointments to the Board are

made on merit reviewing the balance

of skills and experience needed on the

Board. The Committee considered

these aspects before recommending

the appointment of Sue Clark as the

Senior Independent Director during

the year.

The Committee will identify

suitable candidates based

on merit against objective

criteria and with due regard

for the benefits of diversity

on the Board including

social and ethnic

background, cognitive and

personal strengths as well

as diversity of gender.

See pages 85 and 101 The Committee emphasises

identification of suitable candidates

based on the role profile required on the

Board following discussion with the

Board members as well as considering

diversity, social and ethnic background.

These requirements are briefed to the

external consultants for them to be able

to develop a role profile that suits our

purposes. During the year, RR developed

a role profile for appointment of Senior

Independent Director based on which

suitable candidates were identified by

the Committee.

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Governance

As the new Chair of the Audit Committee, I am

pleased to present the Committee report for the

year ended 30 September 2023.

The Committee continued to play a key role in

assisting the Board in its oversight responsibility

and monitoring the integrity of the financial

information for the benefit of our shareholders.

This has included challenging management on the

significant accounting judgements made in our

financial reporting, as well as reviewing the analysis

behind our going concern and viability statements,

and considering the processes that underpin the

production of the Annual Report and Accounts.

The Committee continued to oversee the

programme of financial control improvements,

receiving regular updates on the progress of key

initiatives such as a more automated maintenance

model for leased aircraft, a new treasury

management system and the planned

implementation of a new revenue accounting

system. As part of the control improvement

initiatives, the finance team reviewed the

translation of foreign currency balances

throughout the financial statements. This identified

two errors with the existing methodologies which

have now been corrected in these financial

statements and processes amended accordingly

to prevent the issue recurring in the future.

The Committee also focused on the further

development of the corporate risk management

framework to ensure principal and emerging risks

were appropriately assessed, and mitigations

identified and appropriately reported. The

Committee assisted the Board in undertaking a

robust assessment of the Group’s principal and

emerging risks.

AUDIT

COMMITTEE

REPORT

Members

David Robbie (Chair)

Catherine Bradley CBE

Sue Clark

from 1 March 2023

Julie Southern

until 9 February 2023

Dr Detlef Trefzger

The Committee received regular updates at each

meeting from the Risk & Assurance team, covering

the risk management framework and risk

management process, internal audit, whistleblowing,

business integrity and fraud matters.

This year, we also received an update on easyJet’s

supplier relationship management and the work by

the Procurement team to enhance our activities in

this area.

Before each meeting, I met with the CFO, the

Director of Reporting and Financial Control, the

Director of Risk & Assurance and the External

Audit team, to ensure the key issues were being

addressed at each meeting. After each Committee

meeting, I provided an update to the Board on the

key topics discussed during our meetings. The

Committee meets with the external auditors after

Committee meetings without management

present when appropriate.

Looking forward, we will be conducting an audit

tender process in the coming year as set out later

in this report. The Committee will also continue to

review the financial reporting of the Group and its

accounting policies, with any major accounting

issues of a subjective nature discussed by the

Committee. We will continue to develop our work

on the effectiveness of the risk management

process and are also mindful of the changing

regulatory landscape. This includes the proposals

around the government’s audit and governance

reforms and the role of the Committee in

reviewing narrative reporting, and we will ensure

compliance with any new requirements.

David Robbie

Chair of the Audit Committee

COMMITTEE REPORTS (CONTINUED)

The Committee consists of the Independent

Non-Executive Directors listed above right. All

members of the Committee are Independent

Non-Executive Directors as required by the

Code. Member biographies can be found on

pages 89 to 91.

The Board has confirmed that David Robbie

has recent and relevant financial experience

and is satisfied that all Committee members

have a depth of financial and commercial

experience including the travel sector in which

the Company operates.

The Committee met four times during the year,

with members of senior management required

to attend as and when appropriate. The

Committee also met with the external auditors

separately when appropriate. Meeting

attendance can be found on page 83.

In addition, the Committee Chair holds

regular private sessions with the Chief

Financial Officer (CFO), senior members

of the Finance team, the Director of

Risk & Assurance and the External

Audit team, to ensure that open and

informal lines of communication exist

should they wish to raise any concerns

outside formal meetings.

The Committee’s terms of reference can

be found on the Company’s website at

corporate.easyJet.com

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KEY ACTIVITIES DURING THE YEAR

The roles and responsibilities of the Committee are

set out in full in its terms of reference. The main

areas of Committee activity during the financial

year are set out below with further detail on the

following pages.

Financial and narrative reporting

> Reviewing the integrity of the 2022 full-year and

2023 half-year financial statements and formal

announcements relating to the financial

performance and governance of the Group.

> Reviewing and challenging the material areas

in which significant judgements were applied,

based on reports from both the Group’s

management and the external auditors in the

preparation of the 2022 full-year and 2023

half-year financial statements. Further

information is provided in the significant

judgements section on page 105.

> Reviewing the information, underlying

assumptions and stress-test analysis presented

in support of the viability statement and going

concern status.

> Undertaking a fair, balanced and

understandable assessment of the Annual

Report and Accounts for the 2022 financial year

and the 2023 half-year statement.

> Reviewing the consistency and appropriateness

of the financial control and reporting

environment.

> Reviewed the plans and process for the

preparation of the Annual Report and Accounts

for 2023, including timelines and reviewing the

approach to ESEF tagging.

Internal control and risk management

> Considering the progress made on the financial

control framework given a number of system

implementations were underway to strengthen

the control framework.

> Confirming the adequacy and effectiveness of

the Group’s risk management systems and

internal control processes, through evaluating:

risk and assurance plans; Internal Audit reports;

risk assessments; and control themes.

> Overseeing the Group’s risk framework,

including the corporate risk framework and a

robust review of the Company’s principal and

emerging risks and uncertainties, including

climate change risk.

> Reviewing the development of the assurance

map against all the principal risks to provide

greater transparency to the Board and

Committee on the strength of assurance across

different areas of the organisation as well as

process for the development of corporate risk

strategy for FY23 and FY24.

> Receiving an update on the results of the control

self-assessment undertaken on the

implementation of financial controls and

understanding of the policies and processes

underpinning them.

> Reviewing the translation of foreign currency

balances, correcting the financial statements

following the identification of two errors with the

existing methodology, and updating the

processes to ensure the errors do not recur in

the future.

> Reviewing the Group’s Delegated Authority

Policy.

> Reviewing principal and emerging digital safety

risks and receiving regular updates on the

progress of the Group’s Digital Safety

Programme.

> Reviewing the activities of the Procurement

function and efforts relating to supplier

relationship management.

> Reviewing the Group’s insurance programme.

Compliance, whistleblowing and fraud

> Reviewing the Business Integrity measures

including the ‘Speak Up, Speak Out’

whistleblowing process and investigations.

> Receiving updates on work undertaken by

management on the anti-bribery and anti-

corruption framework to assess controls in place

including development of targeted training.

> Receiving updates on fraud investigations to

understand the process undertaken to identify

fraud risks and improvement actions as well as

reviewing the FY23 action plan on fraud

reporting requirements.

> Monitoring the process undertaken by the

Business Integrity team around compliance

activity undertaken within the business and

creation of a policy framework to standardise

policies across the business.

Internal Audit effectiveness and

review of activities

> Receiving an update on the work undertaken

by Internal Audit, including audit resources,

progress with the FY23 Internal Audit Plan,

significant findings and audit actions.

> Assessing the effectiveness and independence

of the Internal Audit function including

consideration of key Internal Audit reports,

implementation of Internal Audit

recommendations and Internal Audit’s

compliance with prevailing professional

standards.

> Approving the Internal Audit Charter, Annual

Plan, Budget and Annual Report of Internal

Audit and Business Integrity activities.

Relationship with the external auditors

> Reviewing the external audit approach

undertaken by PricewaterhouseCoopers LLP

(PwC) as the external auditors, significant risks,

areas of audit focus, scope and materiality

for FY23.

> Reviewing the effectiveness and quality of the

external audit process.

> Assessing the performance and continued

objectivity and independence of the external

auditors.

> Agreeing the external audit engagement

and audit fee.

FINANCIAL AND NARRATIVE REPORTING

Significant judgements

The Committee focuses on maintaining the

integrity and quality of our financial reporting,

considering the significant accounting judgements

made by management and the findings of the

external auditors. The Committee assesses

whether suitable accounting policies have been

adopted and whether management has made

appropriate estimates and judgements through

reviewing and challenging accounting papers

prepared by management. The Committee also

reviewed the reports by the external auditors on

the half-year and full-year results, which

highlighted any issues arising from the work

undertaken on the audit.

The significant issues considered in relation to the

financial statements are detailed on the following

page.

SIGNIFICANT JUDGEMENTS AND ESTIMATES

In general, the Committee assesses key

judgements by receiving a report on the

topic prepared by management which

details the decision-making process

which management has been through

in making that judgement and any

assumptions used. The Committee is

then able to challenge management on

critical aspects of the judgement and

discuss the matter with the external

auditors in arriving at their own

assessment of the position.

Going concern

The Committee reviewed and challenged

management’s assessment of base case and

downside forecast cash flows, including

sensitivity to macro-economic uncertainties such

as a sustained downturn in demand and higher

interest rates and fuel prices, combined with

significant operational disruption. Having

considered and challenged these downside

scenarios and reviewed the associated going

concern disclosures in the financial statements,

the Committee was comfortable with

recommending to the Board that it adopt the

going-concern basis of preparation for these

financial statements.

Carrying value of assets

The Committee considered whether the carrying

value of goodwill, landing rights and aircraft

assets held by easyJet should be impaired or

otherwise adjusted. There is judgement in the

assumptions underlying the calculation of the

value in use of the business being tested for

impairment – primarily whether the forecasted

cash flows are achievable, the potential impact

of climate change on those cash flows, the

calculated WACC rate and the overall macro-

economic assumptions. The Committee

addressed these matters by challenging

management on the stress testing performed

on the calculation of the value in use and other

relevant information used to support the carrying

value of assets. The forecasted cash flows used

in the calculation were presented to the Board.

In relation to the disposal of landing rights at

Berlin Airport, the Committee reviewed

management’s paper to ensure consistency with

the calculations and disclosure made in the 2022

Annual Report and Accounts.

Translation of foreign currency

Management conducted a detailed assessment

this year of the existing process for the translation

of foreign currency balances throughout the

financial statements. The initial focus was on the

translation of the local currency balance sheets of

the Group’s non-UK subsidiaries into sterling for

the purposes of producing the Group’s

consolidated statement of financial position. Its

conclusion was that there was a flaw in the

existing methodology which dated back to the

introduction of the existing general ledger system

in 2007; foreign exchange gains and losses which

should have been posted to the translation

reserve on consolidation were instead being

posted directly to the Group income statement.

Analysis showed that the impact was not material

in recent years, however the effect over time was

such that there needed to be an adjustment of

£78 million between retained earnings and the

translation reserve. The Committee reviewed

management’s paper and calculations and along

with the Group’s auditors considered the proposal

to reflect the adjustment as a current-year

transfer between reserves. The nature of the error

was considered to not constitute a material error

on a qualitative basis and therefore the

Committee concluded that this was the correct

course of action with appropriate disclosure.

A detailed review also highlighted a second issue,

this time regarding the translation into sterling of

US dollar denominated leased aircraft right of use

assets and the associated depreciation, which

arose in certain circumstances when lease

modifications occurred in 2021. The Committee

considered management’s proposal to disclose

the required £19 million adjustment under

non-headline items and were comfortable that

this was an appropriate remedy, with suitable

disclosure.

Aircraft maintenance provisions

Throughout the year, the Committee received

updates on progress with implementing a new,

more automated, model for calculating the

maintenance provision for easyJet’s leased

aircraft. This model will be more robust and easier

to update than the suite of spreadsheets it

replaces and represents a significant improvement

in the control environment around this material

balance. Management performed a parallel

calculation over an extended period during the

year to prove that the new model was calculating

the provision correctly, and the Committee was

happy to approve using the model for the

year-end provision calculation.

The Committee then reviewed the maintenance

provision at the year end as a number of

judgements are used in the calculation of the

provision, primarily pricing, utilisation of aircraft

and the timing of maintenance checks. The

Committee addressed these matters using

reports received from management which

detailed the basis of assumptions used and

challenged those assumptions to test their

validity. The Committee concluded that the

year-end maintenance provision was appropriately

calculated and disclosed.

Other key judgemental accruals, provisions

and contingent liabilities

The Committee reviewed and challenged the

level and calculations of key accruals and

provisions which are judgemental in nature and

the appropriate disclosures, including customer

claims in respect of flight delays and

cancellations, legal liabilities and restructuring

provisions. The Committee also considered the

appropriateness of the recognition of contingent

liabilities as at the year end.

Deferred tax asset

The Committee has considered the recoverability

of the deferred tax asset based on the expected

future taxable income of the Group and is

comfortable with the position taken.

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Fair, balanced and understandable

The Committee conducted an assessment and

recommended to the Board that, taken as a

whole, the 2023 Annual Report and Accounts

(which the Board subsequently approved) is fair,

balanced and understandable, and provides the

necessary information for shareholders to assess

the Group and Company’s position and

performance, business model and strategy. In

reaching this conclusion, the Committee critically

considered the overall review and confirmation

process around the Annual Report and Accounts,

including:

> The input of subject matter experts, the AMB

and other senior management and, where

applicable, the Board and its Committees.

> The processes and controls which underpin the

overall review and confirmation process,

including the preparation, control process,

verification of content and consistency of

information being carried out by internal

financial controls specialists.

> Ensuring key messages are clearly summarised

and reflect the Group’s performance as a whole,

as well as provide stakeholders with clear,

concise and transparent disclosures.

> Review of the Annual Report and Accounts

held by senior management and other subject

matter experts to focus solely on the reporting

being fair, balanced and understandable.

The Committee was provided with the opportunity

to review and comment on iterations of the draft

copy of the Annual Report and Accounts.

In carrying out the above assessment, key

considerations included ensuring that there was

consistency between the financial statements and

the narrative provided in the front half of the

Annual Report, and that there was an appropriate

balance between the reporting of weaknesses,

difficulties and challenges, as well as successes, in

an open and balanced manner, including linkage

between key messages throughout the document.

RISK MANAGEMENT AND INTERNAL CONTROL

The Board as a whole, including the Committee

members, considers the nature and extent of

easyJet’s risk appetite that is acceptable in order

to achieve the Group’s strategic objectives and for

ensuring that an appropriate culture has been

embedded throughout the organisation. The

Committee has reviewed the work undertaken by

management on the assessment of the Group’s

emerging and principal risks, including their impact

on the prospects of the Group.

During the year, the Committee reviewed the

development of the corporate risk management

framework and risk appetite, including the process

for identifying, evaluating and managing the

Company’s principal risks. The programme, led by

the Risk & Assurance function, focused on

understanding current and emerging risks and

how these are managed in line with the risk

appetite, developing a risk and assurance map,

and implementing a consistent risk scoring

mechanism and risk taxonomy to cover all risks.

In order to assess the robustness of easyJet’s risk

appetite, the Risk & Assurance function conducted

a workshop to validate future risk appetite. The

Board received the output of the risk appetite

exercise for consideration and agreement.

easyJet’s system of internal controls, along with its

design and operating effectiveness, which includes

the Group’s financial reporting process, is subject

to review by the Committee, through reports

received from management, along with those from

both internal and external auditors. Any control

deficiencies identified are followed up, with action

plans tracked by the AMB and the Committee.

There were no significant financial control

deficiencies identified by the Committee during

the year.

The Finance team has regular proactive

conversations with the external auditors on topics

which are of audit relevance. The external auditors

perform audit procedures and challenge of the

Annual Report and Accounts and present their

findings to the Committee.

The Committee reviewed the Group’s Going

Concern and Viability Statements and considered

the thorough assessment reports prepared by

management in support of these statements. The

Viability Statement section on page 68 provides

details of the base case and downside scenarios

applied in assessing the appropriateness of this

statement and the Committee provided robust

challenge of the assumptions applied by

management as part of this assessment.

The Committee continues to conclude that the

time period of three years used to assess the

Viability Statement remains appropriate. Based on

these assessments, the Committee confirmed that

the application of the going concern basis for the

preparation of the financial statements continued

to be appropriate and recommended the approval

of the Viability Statement.

The Committee also reviewed the approach and

controls around the enhanced ESEF requirements

for the Annual Report and Accounts for 2023.

Reporting controls

Management is responsible for maintaining

adequate internal control over the financial

reporting of the Group. A summary of the Group’s

financial results and commentary on performance

measures is provided to the Board each month.

Controls are in place over the preparation of

financial data including: balance sheet

reconciliations, review meetings on key balances

and commentary on variances to forecast and

prior periods. On a monthly basis, senior

management, including the Director of Reporting

and Financial Control, and the CFO, review the

management reporting packs.

The Annual Report and Accounts are produced by

the Group Financial Control team based on

submissions from individual teams across the

business including Investor Relations, Finance, HR,

Company Secretariat and Risk & Assurance.

The report contributors are required to maintain

supporting evidence for their submissions and

ensure they are reviewed. The figures are then

independently validated by the Group Financial

Control team.

Senior members of the Finance team including the

CFO, the Director of Reporting and Financial

Control, and the Group Chief Accountant meet

with the Committee to present key events and

discuss areas of judgement or in-depth

presentations on significant areas.

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AUDIT COMMITTEE REPORT (CONTINUED)

The Committee received updates on the progress

made on the framework as well as issues identified

as a result of deep dives followed by mitigating

actions. In addition, the Committee agreed that

anti-fraud procedures would be reviewed in FY24

to make enhancements where possible to

minimise the risk of fraud offences to ensure

compliance with forthcoming enhancement to

anti-fraud legislation.

Internal Audit

The Committee is responsible for overseeing the

work of the Internal Audit function, which provides

independent and objective assurance to

management, the Committee and the Board on

the effectiveness of the Group’s risk management

and internal controls. The purpose, scope and

authority of Internal Audit is defined within its

charter which is approved annually by the

Committee. To safeguard independence, the

Director of Risk & Assurance has a dual reporting

line into the Chair of the Audit Committee and

CFO, and can meet privately with the Committee

without management. External providers can

be engaged where specific skills are required.

The Internal Audit function will undergo an

independent External Quality Assessment in

early FY24.

The Committee reviews and approves the scope of

the Internal Audit annual plan and resourcing levels.

Increased focus on financial processes and controls

was included in FY23 and future audit plans. The

Committee reviews continuous improvement in

audit methodology. Members have access to

detailed Internal Audit reports. It assesses the

quality of Internal Audit reports and considers

management’s actions to address findings.

At each Committee meeting, an update is received

on progress against the Internal Audit annual plan

and the status of the closure of recommended

actions.

The Committee received detailed updates on

audits with limited assurance and recommended

action plans and management responses. The

Committee also considers stakeholder feedback

on the quality of Internal Audit’s work.

The Group is committed to the highest standards

of quality, honesty, openness and accountability.

The Code includes a provision that there should be

a means for the workforce to raise concerns and

that the Board should routinely review this

mechanism and the reports arising from its

operation. The Group and all operating companies

have whistleblowing policies in place and the

Board and Committee receive regular reports on

this subject, which is communicated internally as

the ‘Speak Up, Speak Out’ (SUSO) mechanism. The

Committee assists the Board in ensuring that

adequate arrangements are in place for the

proportionate and independent investigation of

such matters and for appropriate follow-up action,

with trends being regularly reported to the Board.

Employees are encouraged to raise concerns under

the policy and any concerns raised are investigated

carefully and thoroughly to assess what action, if

any, should be taken. All employees are able to

report concerns in their local language. The

Business Integrity Committee is a management

forum on whistleblowing. It receives summaries of

all reported concerns; it monitors any ongoing

concerns and ensures that the proposed outcomes

of investigations are fair, transparent and robust,

with root causes identified and remedial actions

agreed. Any matters of significance are reported to

the Committee and the Board, along with a

comprehensive full-year report.

As a result, the positive increase in SUSO cases

continued in FY23, with a total of 233 cases

received, compared to 105 cases in FY22. All

reports were followed up, triaged to relevant areas

of the business and investigated where

appropriate. The Committee was pleased to see

both the increased use of the whistleblowing

channels and appropriate action taken for

underlying themes.

To ensure mitigation against fraud risks,

management has conducted deep dives into the

Group’s Anti-Bribery and Corruption Framework

and has plans to launch a wider fraud investigation

framework across the Company in early FY24.

To ensure the robustness of our financial controls, a

financial control improvement programme was

launched in the previous financial year.

Management has completed the documentation of

key financial processes and is now working to

implement control improvements which were

identified through this exercise. Management has

also worked with BDO to implement a system

which will facilitate the ongoing monitoring of the

operation of key financial controls, through a

combination of self-certification (or attestation) by

control operators and independent testing of the

operation of controls by appropriate compliance

teams. The system was implemented just before

the year end with the intention that all control

operators will be self-certifying on the system by

early 2024. The Committee will undertake regular

reviews of the effective operation of these key

financial controls in the forthcoming financial year.

In the meantime, the updates provided to the

Committee during the year confirmed that no

significant control gaps had been identified and

there were no known breakdowns of critical

controls in the current financial year.

As a result of this annual review of the

effectiveness of the risk management and internal

control systems, which the Committee undertakes

on behalf of the Board, it is considered that the

Board has fulfilled its obligations under the Code.

Further details on the Group’s principal risks and

uncertainties and their impact on the prospects of

the Group are set out on pages 61 to 66.

Compliance, whistleblowing and fraud

To strengthen the Compliance and Assurance

function in FY23, management had embedded a

compliance and assurance framework. This

included the development of a Group-wide policy

management framework for management and

assurance of policies across the organisation. It

also covered the development of a supplier

relationship management framework to identify

how our suppliers comply with our policies initially

and on an ongoing basis. The Committee received

regular updates on the progress made against the

compliance and assurance framework.

External audit

PwC, as the external auditors, is engaged to

conduct a statutory audit and express an opinion

on the Group’s financial statements.

During the year, PwC presented the strategy and

scope of the audit undertaken as well the areas of

focus providing an opportunity for the Committee

to monitor progress and raise questions. PwC

shared insights and feedback with management

and refined the planned audit approach for the

financial year ended 30 September 2023.

Following the retirement of Owen Mackney, he was

succeeded as external audit partner by Matthew

Mullins, Senior Statutory Auditor with the

responsibility for signing the audit opinion on

behalf of PwC. The external audit plan and the

£1.87 million fee proposal for the financial year

(2022: £1.1 million) was prepared by PwC and

presented to the Committee for consideration and

approval.

External auditors effectiveness

The Audit Committee is focused on ensuring the

external auditors deliver a high-quality audit and

plays an essential role in overseeing the Group’s

relationship with the external auditors to ensure

their independence, the quality of the external

audit process and provide challenge where

necessary. The Committee has regular

engagement with the external auditors, including

meetings without any member of management

being present, as well as ahead of each

Committee meeting. It also assesses the

effectiveness, independence, objectivity and

quality of the external auditors by reviewing,

among other things:

> The audit approach, key areas of focus, scope

and level of fees for the audit.

> All key external auditors plans and reports; in

particular those summarising audit work

performed to address significant risks and

critical judgements identified, and detailed audit

testing thereon.

> Quality, knowledge and expertise of the Audit

Engagement team, the nature of their interaction

with management and Audit Committee

members, and the culture they display.

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COMMITTEE REPORTS (CONTINUED)

AUDIT COMMITTEE REPORT (CONTINUED)

The policy sets out the categories of non-audit

services and related approvals required, and those

non-audit services which the auditors are

prohibited from undertaking. Certain audit-related

non-audit services are deemed pre-approved by

the Committee but only up to a value of

£100,000, such as reporting on regulatory returns.

Other non-audit services require Audit Committee

approval as set out in the policy.

An additional protection is provided by way of

a non-audit services fee cap. The Audit Committee

(or the Company) may not approve an

engagement of the external auditors if annual

non-audit services fees would exceed 70% of

the average audit fees (not including fees for

audit-related services or for services required

by regulation) charged in the previous three

financial years.

During the year, PwC undertook non-audit services

for the Company with a total value of £0.5 million,

as set out in note 3 to the financial statements.

These fees were within the limit of the non-audit

services fee cap mentioned above and included

audit-related non-audit service fees of £0.2 million

and other assurance related non-audit services

fees of £0.3 million, primarily related to a working

capital review to support the Class 1 transaction

arising from the agreement with Airbus.

The external auditors set out their audit process in

their Independent Auditors’ Report, which can be

found on pages 136 to 141.

Audit Committees and the External Audit:

Minimum Standard

In May 2023, the FRC published the Audit

Committees and the External Audit: Minimum

Standard, which took effect immediately for FTSE

350 companies on a comply or explain basis.

This Audit Committee Report describes how the

Audit Committee has complied with each of the

provisions of the Minimum Standard during the

year (in particular the ‘External Audit’ section of

this report).

An explanation of Group’s accounting policies is

provided on pages 147 to 157.

External audit tendering

PwC was first appointed to audit the Annual

Report and Accounts for the year ended

30 September 2006 and has therefore served a

17-year term, now on the 18th year. Under

applicable audit legislation, companies are

required to have a mandatory tender of auditors

after 10 years, or 20 years if there is a competitive

retender at 10 years.

During the 2015 financial year, the Committee

led a tender process for external audit services,

following which the Committee agreed to

recommend that the Board reappoint PwC as,

on balance, it performed best against the

Committee’s pre-agreed selection and assessment

criteria. PwC cannot continue as Group auditors,

therefore, beyond the financial year ending

30 September 2025.

The Committee’s intention is to run an audit

tendering process in 2024 to enable new

auditors to be selected, with at least one mid-tier

challenger audit firm included in the tender. This

timing will also enable an appropriate ‘cooling-in’

period to occur or for existing services to be

tendered to a new supplier if necessary, in good

time before the new Group auditors start to

shadow PwC in 2025 ahead of taking over as

Group auditors from 1 October 2025.

The Company confirms that it has complied with

the provisions of the Statutory Audit Services for

Large Companies Market Investigation (Mandatory

Use of Competitive Tender Processes and Audit

Committee Responsibilities) Order 2014 relating to

tendering and non-audit services.

> Key accounting and audit judgements and how

the external auditors have challenged

management in reaching a conclusion.

> Reviewing the findings from the audit (or

management letter) and other communications

with the Committee, to assess whether it is

based on a good understanding of the

Company’s business.

> Reviewing and discussing FRC audit quality

inspection reports.

The Committee was satisfied that the agreed audit

plan had been met and that the external audit

process had provided appropriate focus to those

areas identified as the key risk areas to be

considered by the Committee and that the

auditors had challenged management as part of

the process. It had also continued to address the

areas of significant accounting estimates. On this

basis, and considering the views of senior

management, including the CFO and Director of

Risk & Assurance, the Committee concurred that

the external audit had been effective and was of

a high standard.

External auditors’ independence and objectivity

The Committee also assesses the independence

and objectivity of the external auditor through the

assurances provided by the external auditors on

the independence, challenges to management on

significant accounting judgements and

professional scepticism. In addition, oversight of

the non-audit services policy and level of fees

paid, as well as employment of former PwC

employees, are also considered in determining the

independence of the external auditors.

To preserve objectivity and independence, the

external auditors do not provide consulting

services unless this is in compliance with the

Group’s Non-Audit Services Policy which reflects

the applicable audit regulations and the FRC’s

Revised Ethical Standard on permitted services.

The policy also covers the approach around hiring

former external audit employees in order to

avoid any conflict of interest and to protect

external auditor independence. This policy is

available to view on the Company’s website at

corporate.easyJet.com.

External audit tendering timeline

PwC cannot

continue beyond

financial year end

30 September 2025

Competitive tender

to take place

Mandatory

appointment of

new external audit

lead partner after

five years

Fully competitive

tender; PwC

reappointed for the

financial year ending

30 September 2016

PwC appointed

2024

2020

2006

2015

2025

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Annual Report and Accounts 2023

Strategic report Financials

Governance

I am pleased to present the Finance Committee

Report for the year ended 30 September 2023.

This report provides an outline of the key activities

of the Committee during the year in overseeing

the Group’s treasury operations and funding

activities.

The Committee provides oversight by reviewing

and monitoring the Group’s liquidity and hedging

approach, treasury activities and associated risks

in this area. The Committee is also responsible for

reviewing and recommending to the Board any

financing arrangements that may be appropriate

for the Company to enter into, including aircraft

financing. In doing so, it assists the Board in the

effective discharge of its duties in relation to

balance sheet considerations, financing options

and treasury arrangements.

During the year, the Committee focused on

ensuring the Company’s approach to hedging and

treasury strategies remained appropriate. This

included a review of our balance sheet principles.

The Committee also reviewed the liquidity

management strategy and the counterparts that

easyJet invests with.

FINANCE

COMMITTEE

REPORT

Members

Catherine Bradley CBE (Chair)

David Robbie

Harald Eisenächer

Dr Andreas Bierwirth

until 9 February 2023

The Committee consists of the Independent

Non-Executive Directors listed above right. All

members of the Committee are Independent

Non-Executive Directors. Member biographies

setting out their skills and experience can be

found on pages 89 to 91.

The Company Secretary acts as Secretary to

the Committee and members of the executive

management are invited to attend meetings.

The Committee met four times during the year and

meeting attendance can be found on page 83.

COMMITTEE REPORTS (CONTINUED)

The Committee’s terms of reference can

be found on the Company’s website at

corporate.easyJet.com

The Committee also oversaw the refinancing of

the UK Export Finance Facility. The Company took

the opportunity to repay the drawn element of

$950 million on the old facility, significantly

reducing the Company’s ongoing interest charge.

The new $1.75 billion facility remains undrawn,

providing the Company with significant levels of

liquidity and extends the maturity of the facility to

2028. It was also decided to link this facility to

sustainability targets. This is the first time the

Company has linked debt to sustainability targets,

showing its commitment to the net zero pathway.

After each Committee meeting, I presented an

update to the Board on the key issues discussed

during our meetings.

Catherine Bradley CBE

Chair of the Finance Committee

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Governance

COMMITTEE REPORTS (CONTINUED)

FINANCE COMMITTEE REPORT (CONTINUED)

KEY ACTIVITIES DURING THE YEAR

Liquidity

The Committee continued to monitor the

Company’s liquidity during the year, including

where cash balances were held. easyJet has a

clear liquidity policy of holding liquidity of at least

Unearned Revenue plus £500 million that protects

customers’ money and creates a buffer for shock

events. The Committee received regular updates

on liquidity to ensure that the Company had

liquidity in excess of its liquidity policy and was

able to protect itself against uncertainty.

Hedging

easyJet provides cash flow and P&L certainty

by hedging its largest financial exposures. The

Committee monitored the hedging activity on an

ongoing basis through review of Jet fuel, USD and

Euro policies and ensured the hedging policies

were benchmarked appropriately.

To ensure reduced volatility in hedging policies,

the Committee reviewed the current Capex

Hedging Policy against competitors and approved

amendments to the policy. The Committee stayed

close to changes in ETS schemes over the course

of the year, recommending changes to the Carbon

Hedging Policy where appropriate. In addition, the

Committee also reviewed the procedures on

easyJet holidays hedging to ensure the hedging

levels remained appropriate as the business grows.

Debt

The Committee reviewed and recommended to the

Board a new undrawn five-year sustainability-linked

term loan facility of $1.75 billion underwritten by a

syndicate of banks and supported by a partial

guarantee from UK Export Finance under their Export

Development Guarantee scheme. The new five-year

sustainability-linked facility is currently undrawn and

extends easyJet’s debt maturity profile. The facility

also reduces the Group net financing costs. A

sustainability key performance indicator linked to a

reduction in carbon emission intensity in line with

easyJet’s SBTi-validated target is embedded within

the facility, with a margin adjustment mechanism

(upward or downward) conditional to the

achievement of specific milestones.

easyJet capitalised on its strong liquidity to fully

repay the existing UKEF drawn balance of $950

million, which had incurred interest at a floating

rate. The original facility was then cancelled,

resulting in no aircraft being encumbered within

the Group.

In addition to the repayment of the drawn UKEF

balance, the Company repaid one of its €500

million Eurobonds in February 2023. Both of these

activities reduced the gross debt position in the

year. An additional bond repayment of €500 million

took place in October 2023 after the year end.

Aircraft finance

The Committee received analysis on the different

ways easyJet can source additional aircraft into

the fleet. The analysis showed the best financial

outcome from a P&L and cash perspective in the

short term and over the lifetime of the aircraft,

based on current market dynamics. This enabled

the Committee to provide further insight into the

various options available to the Company when

purchasing and leasing aircraft.

In September 2023, the Committee reviewed, for

instance, the process surrounding the sale and

leaseback of 11 A319 aircraft, recommending to the

Board that easyJet proceed with management’s

proposal of exiting those assets through this

method.

Other matters

In addition, the Committee also received analysis

on easyJet’s balance sheet, including what key

principles and policies the Company adopts. The

analysis also explained how these are operated

in practice and their importance to easyJet. This

allowed the Committee to review those principles

and provide feedback on the application of the

principles.

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Annual Report and Accounts 2023

Strategic report Financials

Governance

As the new Chair of the Safety & Operational

Readiness Committee, I am pleased to present

the Committee report for the year ended

30 September 2023.

The ability to deliver a safe and secure operation

is easyJet’s top priority. With this in mind, I oversaw

a review of the Committee’s terms of reference

during the year to better reflect the scope of its

activities. Following this review, the Committee’s

terms of reference were updated and the role of

the Committee confirmed as:

> Strategy: to approve the annual safety plan

which sets out the Group’s strategy to address

existing and emerging safety risks, and to

monitor the Group’s progress on implementing

the safety plan.

> Performance: to identify and monitor both

existing and any new, emerging or changing

safety risks, and related mitigations, receive

updates on the performance of the Group on

safety issues, to identify existing and emerging

safety risks and discuss related mitigations.

> Governance: to ensure that an appropriate

governance framework and safety resources

are in place.

> Operational readiness: to receive regular

reports from the Chief Operating Officer on the

main operational performance indicators; and

discuss any new or emerging risks relating to the

safe and effective delivery of operations.

As a result, the Committee name was changed to

Safety & Operational Readiness Committee to

reflect this refreshed purpose.

SAFETY &

OPERATIONAL

READINESS

COMMITTEE

REPORT

Members

Dr Detlef Trefzger (Chair)

Sue Clark

from 1 March 2023

Ryanne van der Eijk

Dr Andreas Bierwirth

until 9 February 2023

Julie Southern

until 9 February 2023

All members of the Committee are Independent

Non-Executive Directors, as listed above right.

Member biographies can be found on pages 89

to 91.

The Company Secretary acts as the Secretary

of the Committee and attends all the meetings.

The Committee met four times during the year and

meeting attendance can be found on page 83.

The Director of Safety, Security & Compliance

and Chief Operating Officer have attended all

meetings during the year. Other members of

the executive management team are invited to

attend all or part of the meeting as appropriate

or necessary including Chief Executive Officer,

Head of Safety, Director of Flight Operations

and Director of Engineering and Maintenance.

During the year, the Committee focused on the

Group’s performance on safety issues through

safety dashboards and trends, and reviews of

existing and emerging risks to understand how

the risk landscape was changing going forward.

The Committee also received updates on winter

2022 and summer 2023 operational readiness

across all areas of the operations (internal and

external), key issues and action plans.

Execution and operations is with the easyJet

Safety Board, which reports to the AMB, to ensure

safety risks and issues are identified and prioritised

and action plans are executed to mitigate existing

and emerging risks.

After each meeting, the Board is updated on the

key issues discussed during the Committee

meetings and with the Committee’s assessment of

the status of safety and operational readiness

management within the airline.

Dr Detlef Trefzger

Chair of the Safety & Operational

Readiness Committee

COMMITTEE REPORTS (CONTINUED)

The Committee’s terms of reference can

be found on the Company’s website at

corporate.easyJet.com

Safety strategy

Our Safety, Security and Compliance Plan

supports our promise of ‘safety at our heart’

for our people, our customers, suppliers and

those affected by our activities, in terms of

operational safety, health and safety,

occupational health, compliance and

environmental protection. The Committee

monitored the progress made against the

FY22–FY27 Plan and reviewed the safety

performance against the plan as well as

keeping track of the longer-term deliverables.

Safety performance

The Committee oversaw the safety issues

and performance against the risk framework

through safety dashboards and trends. This

allows the Committee to understand

easyJet’s safety performance in each area of

the business as well as highlight current and

emerging threats and risks at easyJet and

the aviation industry as a whole and actions

taken to mitigate them.

Safety governance

To ensure that easyJet’s Safety, Security and

Compliance team was adequately resourced

and had the appropriate information to

perform its functions effectively and in

accordance with the relevant professional

standards, the Committee received regular

reports from the Director of Safety, Security

& Compliance. These reports provided

assurance to the Committee on the Safety,

Security and Compliance programme.

The Director of Safety, Security &

Compliance reports regularly to the AMB, the

Committee and the Board. He has the right

of direct access to the Committee Chair and

to the Chair of the Board, which reinforces

the independence of safety oversight.

Operational readiness

Operational readiness is key to delivering a

safe, efficient and reliable operation for

easyJet’s winter and summer schedule.

The governance review of the Committee’s

role highlighted the importance of the

Committee receiving updates on operational

readiness on a regular basis to ensure

resources, infrastructure and processes were

in place to deliver an efficient operation.

As a result, the Committee received detailed

reports from the Chief Operating Officer on

seasonal planning, recruitment and training,

fleet, ground handling, engineering and

maintenance as well as specific base and air

traffic control issues and mitigations given

limited air space following the war in Ukraine

and ATC strikes.

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Strategic report Financials

Governance

COMMITTEE REPORTS (CONTINUED)

SAFETY & OPERATIONAL READINESS COMMITTEE REPORT (CONTINUED)

Winter readiness 2022

The Committee reviewed the seasonal readiness

for winter 2022 to ensure tasks across all

departments were on schedule, and that cross-

departmental communications were in place to

improve on issues faced in previous years,

including ICC access to Ground Operations

snow plans and Flight and Cabin Operations

collaborating on winter communications for crew.

Fatigue Risk Management (FRM)

The Committee continued to review FRM processes

and techniques and roster stability challenges

following the summer disruption and strikes.

Services to Passengers with

Reduced Mobility (PRM)

The Committee received an update on the

processes and procedures in plan for PRM

services, the responsibility for which sits across

multiple departments at different levels. The

Committee reviewed the current performance

levels, challenges and mitigations in place.

Cabin air quality

Cabin air quality is the term used to cover the

issues of managing cabin and cockpit air. The

Committee received a technical update on the

main causes and the management processes in

place to support the crew in the event of a smell

event on board an aircraft.

LOOKING FORWARD

The Committee will monitor compliance with

regulations and standards, and improvement of

easyJet’s safety, security and environmental

performance as well as provide support to

management on embedding the strong safety

culture which will ensure high standards of safety

continue to be delivered across the Group and all

its operating entities.

KEY ACTIVITIES DURING THE YEAR

Whilst monitoring the areas described above, a

number of deep dives were undertaken across a

wide range of topics and these included the

following:

Summer 2022 performance

The Committee received an update on the safety

performance and issues observed from the

summer 2022 operations. The update covered the

operational disruption experienced by the aviation

industry as a whole, and the increased regulator

oversight in a number of areas as a result.

It also covered the safety performance issues

experienced during this period, and the initiatives

undertaken to manage or mitigate the effects,

including a summer safety campaign by the

Ground Operations team and a security audit

programme by the Security team with a focus on

the areas of the network that present a higher

security risk.

Category C airports

Category C airports are airports that require

additional considerations, experience and/or

qualifications from the flight crew due to the

elevated risks and hazards presented there. The

Committee did a deep dive into this category of

airports, the considerations for operating out of

these airports, and what controls were in place to

mitigate or eliminate the potential hazards faced.

The Committee also did a deep dive into the

summer 2022 operational performance at Calvi

Airport in Corsica, which is a category C airport.

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Strategic report Financials

Governance

DIRECTORS’ REMUNERATION REPORT

REMUNERATION

COMMITTEE

REPORT

Member

Moni Mannings (Chair)

Julie Southern

(until 9 February 2023)

David Robbie

Harald Eisenächer

ANNUAL STATEMENT BY THE CHAIR OF THE

REMUNERATION COMMITTEE

There was one change to the membership of

the Committee during the year as set out

above. The Company Secretary acts as

Secretary of the Committee. Other key invitees

include the Chief Executive, the Group People

Director, the Reward Director, the Chief

Financial Officer and external advisers as

relevant.

Member biographies setting out their skills

and experience can be found on pages

89 to 91. The Committee met four times during

the year. Meeting attendance can be found on

page 83.

THE FY23 FINANCIAL YEAR

It has been a very successful year for easyJet,

achieving record performance during summer 2023,

despite the challenges arising from the external

operational environment and high fuel costs. This led

to a pre-tax headline profit of £455 million for the

2023 financial year, an improvement of £633 million

versus the 2022 financial year:

> load factor of 89.3%

> 92.6 million seats flown

> easyJet holidays delivered a profit of £122 million

> announcement of a new base at Birmingham

Airport with three new aircraft and 100 new jobs

for pilots and cabin crew

> headline ROCE of 12.6%.

WORKFORCE PAY AND ENGAGEMENT

In my role as one of the Board’s Employee

Representative Directors, I met with employees

during the year, which provides an opportunity for

me to understand the employee voice and bring

that back to Committee deliberations.

Whilst the Committee closely reviews the approach

for executive reward, the Committee also considers

the wider remuneration arrangements within easyJet

to ensure that these are aligned with the approach

for executive rewards and the broader reward

philosophy. This year, the Committee undertook a

thorough deep dive into the reward arrangements

across all our colleague groups, including pilots,

cabin crew, M&A and engineering. This has given the

Committee a wider perspective to inform decisions

around pay for Executive Directors and Airline

Management Board (AMB) members when

compared to our lower-paid colleagues. The

Committee also takes a close interest in the position

on gender pay at easyJet and how any issues are

being addressed, through regular reporting.

We continue to undertake regular dialogue with

colleague consultative groups to gather their

feedback on remuneration and benefits at easyJet,

including the remuneration approaches for

executives and other colleague groups. As in

previous years, regular meetings are held with the

Reward Director and the Group People Director

to discuss developments in reward over the year,

whilst structured meetings have also been held

with members of the AMB.

We are also aware of the continuing challenges

for individuals with cost-of-living pressures

and easyJet has provided financial wellbeing

advice and guidance to support colleagues,

together with access to benefits providing

discounts on goods and services.

ENGAGEMENT WITH SHAREHOLDERS

As Chair of the Committee, I remain committed

to regular engagement with our shareholders to

answer any questions and respond to feedback. We

were pleased that the Remuneration Report passed

at the 2023 AGM with a vote of 81% in favour,

however we are also mindful that some shareholders

voted against the resolution. The Committee is

aware that some shareholders were either

uncomfortable with the level of incentive payout in

the year, or do not support the use of an Restricted

Share Plan over an LTIP.

The Committee believes that the performance

achieved in the FY22 year against the financial

measures was strong in a highly unpredictable

environment, whilst the downwards discretion

applied to the bonus outcome reflected the overall

experience of our shareholders during the year in

the context of macroeconomic impacts on our

share price. Furthermore, the Committee is

satisfied that the current model of an annual

bonus and the Restricted Share Plan (RSP)

continues to support the business and long-term

strategic decision making. We will continue to

engage with shareholders on decisions made in

the year but are not proposing any further

changes at this time.

INCENTIVE OUTCOMES IN THE YEAR

Annual bonus

The FY23 annual bonus was based 30% on

EBITDAR performance, 50% on a balanced

scorecard of key performance targets including

Group free cash flow, cost programme

performance, on-time performance and customer

satisfaction (CSAT), and 20% on individual

performance including measures linked to

sustainability, strategy, operational resilience,

diversity and employee engagement. These

measures were selected to align with our key

priorities for the year. As was the case last year,

the Committee chose to use a balanced scorecard

approach to assess performance for 50% of the

The Committee’s terms of reference can

be found on the Company’s website at

corporate.easyJet.com

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Governance

DIRECTORS’ REMUNERATION REPORT (CONTINUED)

bonus to ensure that the bonus provided a

balanced incentive to drive performance across a

range of key strategic areas and to provide

flexibility to determine that payouts were fair,

taking into account the underlying performance

and stakeholder experience.

Our financial performance was strong despite the

pressures of inflation, fuel costs and external

operational challenges. This resulted in an outcome

of 65% out of a maximum score of 80% across the

EBITDAR and scorecard measures whilst delivery of

personal objectives and an assessment of individual

performance in the year resulted in a payout at

100% of maximum.

The Committee felt the performance of the

Executive Directors had been particularly strong in

the year with excellent progress made towards a

number of key financial and strategic objectives;

revenue per seat (RPS) remained strong compared

to our peers; we achieved listing for the first time

on the FTSE4Good Series index; and we improved

our employee engagement metrics whilst

achieving targets against a number of operational

factors such as cost, on time performance and

cash flow (further detail on page 122).

Overall, FY23 was a very successful year for easyJet

with record performance during summer 2023 and a

large increase in profit compared to the previous year,

despite the challenges arising from the external

operational environment and high fuel costs.

Additionally, given the financial performance in FY23

alongside easyJet’s strong liquidity position, the Board

intends to pay a dividend of 10% of FY23’s headline

profit after tax, payable in early 2024.

Taking this all into account, it was felt the overall

outcome was appropriate in the context of

performance in the year and no discretion was applied.

Therefore, the final bonuses agreed were £1,326,000

for Johan Lundgren (85% of maximum), and £818,125

for Kenton Jarvis (85% of maximum), of which

one-third will be awarded in deferred shares. The

Committee was also pleased that this strong

performance also enabled the majority of colleagues

to receive payment of a bonus for FY23.

Long Term Incentive Plan

Awards granted in 2020 were due to vest based

on performance over the three financial years to

30 September 2023. The award was based 100%

on Total Shareholder Return (TSR) performance

compared to FTSE 51–150 companies. TSR

performance over the period was below median

and therefore below the threshold target so this

award will lapse.

Restricted Share Plan

In FY23, we made awards under the Restricted

Share Plan (RSP) that was approved by

shareholders at the 2022 AGM. The face value of

the award granted to Johan Lundgren was 125% of

salary and for Kenton Jarvis 100% of salary. The

awards are subject to the same underpins as in

previous years, being that easyJet does not fall

below its minimum liquidity target, there being

satisfactory governance performance, including

no ESG issues that gave rise to reputational

damage and a broader provision to allow the

Committee to reduce the award quantum

appropriately for material underperformance (full

detail on page 119).

Subject to the underpins being met, the awards

will vest in December 2025.

Implementation of remuneration for FY24

The Committee is satisfied that the current

approach to Directors’ remuneration continues to

support the business and long-term strategic

decision making. Therefore, we are not proposing

any changes for the year ahead and the operation

of the annual bonus and RSP will continue broadly

unchanged from last year with the maximum

opportunities remaining the same.

During the year, the Committee also undertook a

broader review of performance measures in the

annual bonus. With easyJet returning to full-year

profitability, and the focus for the business to

move towards +£1 billion in sustainable profit

before tax (PBT) delivery, it was felt to be an

appropriate time to reassess the bonus scheme to

ensure the framework is fit for purpose.

Following this review, it is proposed that the profit

metric will revert back to PBT from EBITDAR in

FY24. Using PBT allows for optimum alignment

between shareholders and employee remuneration

whilst also aligning with mid-term targets and

underpinning our long-term strategy. The move to

PBT will also be rolled out to other employee

groups ensuring consistency across the business.

We are also proposing to replace Cash Flow with

ROCE as part of the balanced scorecard. This will

allow for increased alignment with our medium

term targets.

Further details of the performance measures can

be found on page 118.

Salaries for our Executive Directors have been

considered against the pay awards made for our

employees in 2023 and into 2024 and it is

proposed that an increase of 4% will apply for both

Executive Directors from 1 January 2024. These

increases are below the average increase for the

wider workforce in this year, which is more than

5.2%, and the Committee felt it to be appropriate

in the context of the ongoing strong performance

of our Executive Directors and the financial

outcomes in the year.

On behalf of the Committee I would like to thank

shareholders for their continued support during

2023 and ahead of the next AGM.

Moni Mannings

Chair of the Remuneration Committee

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Governance

REMUNERATION AT A GLANCE

SIMPLE AND

COST-EFFECTIVE

To establish a simple and cost-effective reward package in line with

our low-cost and efficient business model.

ALIGNED

WITH BUSINESS

STRATEGY

To support the achievement of our business strategy of long-term

sustainable growth and returns. The combination of our annual

bonus plan based on a mix of financial, operational and strategic

targets and our long-term Restricted Share Plan ensures that value is

delivered to shareholders and that Executive Directors are rewarded

for the successful and sustained delivery of the key strategic

objectives of the Group.

SUSTAINABLE

LONG-TERM

SUCCESS

Total remuneration is weighted towards elements which align with

sustainable long-term shareholder value creation. This ensures that

there is a clear link between the value created for shareholders and

the amount paid to our Executive Directors.

MINDFUL OF THE

WIDER STAKEHOLDER

EXPERIENCE

Notwithstanding the financial performance of the business, overall

remuneration outcomes will be mindful of the wider stakeholder

experience to ensure Executive Director remuneration remains fair,

responsible and sustainable.

reward principles application in remuneration framework

FIXED PAY

Salary

CEO

£780k

CFO

£550k

Pension

Amount of salary

6.15%

Benefits

> Life assurance

> Other insurances

> Travel expenses

Implementation for FY24: 4% salary increase for FY24, which is below the average increase of more

than 5.2% for the wider workforce in the year, but no changes to remainder of their package.

LONG TERM INCENTIVES

Implementation for FY24: No changes to the operation of the RSP.

2020 LTIP award

100% relative TSR

(v FTSE 51–150)

0% vesting

December 2022 RSP award

CEO:

125% of salary

CFO:

100% of salary

Three-year performance period to

September 2025

Two-year holding period to December 2027

Liquidity and governance underpin

FY23 outcomes — 85% of maximum

Implementation for FY24: Weightings for FY24 will remain the same but EBITDAR will be replaced

with PBT and Free Cash flow with ROCE in the balanced scorecard.

Measure Threshold (10%) Target (50%) Max (100%) Actual % of max

EBITDAR (30%) £890 million £989 million £1,088 million £1,099 million 100%

Balanced scorecard (50%)

Cost programme £100 million £110 million £120 million £131 million

Balanced

scorecard

outcome: 70%

Free cash flow £419 million £480 million £541 million £569 million

Customer satisfaction 72.9% 74.9% 76.9% 73.1%

On-time performance -1 Industry av. 1 0.3

Individual performance

(20%) n/a On target Max Fully achieved 100%

ANNUAL BONUS

Maximum

opportunity

Paid in

cash

Awarded in

shares held

for three years

JOHAN LUNDGREN

CEO

200%

KENTON JARVIS

CFO

175%

2/3 1/3

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Governance

REMUNERATION AT A GLANCE (CONTINUED)

2024 TOTAL SINGLE FIGURE (£’000)

ILLUSTRATION OF REMUNERATION POLICY TIMELINES

JOHAN LUNDGREN (CHIEF EXECUTIVE)

KENTON JARVIS (CHIEF FINANCIAL OFFICER)

The diagram sets out detail on the period of time that Executive Directors are required to retain shares form the

annual bonus and RSP. It also shows for how long malus and/or clawback could be applied to incentives.

Performance period

Fixed

Holding/deferral period

Annual bonus

Subject to malus and/or clawback

Restricted Share Plan (RSP)

FY24 FY25 FY26 FY27 FY28 FY29

ANNUAL

BONUS

Cash award

Deferred share award

RESTRICTED

SHARE PLAN

100%

30% 37%

Minimum

Mid

Maximum

Maximum with 50% share price increase

£911,089

£2,736,289

£3,547,489

£4,054,489

33%

26%

22%

45%

40%

29%

38%

100%

30% 34%

Minimum

Mid

Maximum

Maximum with 50% share price increase

£615,178

£1,687,678

£2,188,178

£2,474,178

36%

28%

25%

46%

40%

26%

35%

ROLE OF THE REMUNERATION COMMITTEE

The key role of the Committee is to make recommendations

to the Board on executive remuneration packages and to

ensure that the Remuneration Policy and practices of the

Company reward fairly and responsibly, with a clear link to

corporate and individual performance.

KEY ACTIVITIES DURING THE YEAR

> Assessed the level of performance in respect

of the bonus for the 2023 financial year, and

LTIP awards set in December 2020 and vesting

in December 2023, to determine appropriate

payouts.

> Undertook a review of the reward frameworks

in easyJet across M&A, pilots, cabin crew and

engineering.

> Reviewed and approved the remuneration

packages for the new AMB members.

> Reviewed the total packages and service

contracts of the AMB and senior

management.

> Reviewed the outcome of the AGM and

agreed appropriate actions following

engagement with shareholders.

> Considered the results and implications of the

UK gender pay gap report and reviewed and

commented on recommendations to address

the gap and challenges faced by the aviation

sector.

> Reviewed and approved the award of the

all-colleague Performance Share Award in

respect of the 2023 financial year.

> Provided oversight on the broader

remuneration framework for the wider

workforce across easyJet and in particular the

response to retaining key colleagues and the

cost of living crisis.

On balance, having taken into account a number

of internal and external measures as well as the

pay ratio analysis, the Committee believes the

proposed remuneration decisions in this report

appropriately reflect the needs of the business

and long-term interests of shareholders. The

Committee also believes the Remuneration

Policy operated as intended in terms of reflecting

Company performance and the overall level of

quantum delivered was considered appropriate

given the business context.

REMUNERATION COMMITTEE KEY

RESPONSIBILITIES

> To set the Remuneration Policy for all

Executive Directors and the Company’s Chair.

> To set the remuneration packages for the AMB

and monitor the principles and structure of

remuneration for other senior management.

> To oversee remuneration and workforce policies

and practices and take these into account

when setting the policy for Director and AMB

remuneration to ensure that they remain

reasonable and appropriate in comparison with

the wider workforce and external market.

> To approve the design of, and determine

targets for, all colleague share schemes

operated by the Group.

> To oversee any major changes in colleague

benefit structures throughout the Company

or Group.

> To review and monitor the Group’s compliance

with relevant gender pay reporting

requirements.

> To assess that all incentives implemented are

consistent with Company culture and purpose.

UK CORPORATE GOVERNANCE CODE –

PROVISION 40 DISCLOSURES

When developing the proposed Remuneration Policy and

considering its implementation, the Committee was mindful

of the UK Corporate Governance Code and considers that

the executive remuneration framework appropriately

addresses the following factors:

Clarity – the Committee is committed to

providing open and transparent disclosures

regarding our executive remuneration

arrangements.

Simplicity – remuneration arrangements for our

executives and our wider workforce are simple in

nature and well understood by both participants

and shareholders. The introduction of the RSP

has further simplified incentive arrangements.

Risk – the Committee considers that the

incentive arrangements do not encourage

inappropriate risk-taking. Malus and clawback

provisions apply to annual bonus and RSP

awards, and the Committee has overarching

discretion to adjust formulaic outcomes to

ensure that they are appropriate.

Predictability and proportionality – the RSP

increases the predictability of outcomes in line

with our growth strategy and minimises the

potential of unintended outcomes. Our policy

illustrates opportunity levels for Executive

Directors under various scenarios for each

component of pay.

Alignment to culture – any financial and

strategic targets set by the Committee are

designed to drive the right behaviours across the

business. The RSP encourages our executives to

focus on making the right decisions for the

execution of our strategy and the creation of

long-term shareholder value.

Strategic report

Governance Financials

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

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DIRECTORS’ REMUNERATION POLICY

During 2021, the Committee undertook a detailed review of our Directors’ Remuneration Policy to ensure that the remuneration arrangements in place best support the long-term strategy of the business

and continue to motivate the Executive Directors, the AMB and the broader management population. It was concluded that replacing the LTIP with a Restricted Share Plan was the best approach going forward.

The Board believes that the Remuneration Policy will not only support long-term strategic decision-making and help retain and motivate management to drive the performance of the business but will also support

the longer term performance of the business including delivering sustainable shareholder value.

The revised policy was approved by shareholders at the AGM on 10 February 2022.

The table below summarises the approved Remuneration Policy, which can be found in full in the 2021 Annual Report on the Company website: corporate.easyJet.com/investors/reports-and-presentations

Summary of policy Implementation for FY24

Salary

Increases normally up to the average workforce level (though may be increased at

higher rates in certain circumstances).

The Committee considers individual salaries at the appropriate Committee meeting each

year after having due regard to the factors noted in operating the salary policy.

No recovery provisions apply to base salary.

The Committee has reviewed the salary for the Executive Directors with effect from

1 January 2024 and agreed to increase the CEO salary to £811,200 (4% increase) and the

CFO salary to £572,000 (4% increase).

These increases are below the average increase for the wider workforce during 2023 and

into 2024, which is more than 5.2%.

Benefits

Executive Directors are entitled to a combination of modest benefits aligned to the market,

such as life assurance and other insurance arrangements, as well as a range of voluntary

benefits including the purchase of additional holiday.

Executive Directors are also eligible to participate in any all-employee share plans operated

by the Company, in line with HMRC guidelines currently prevailing (where relevant), on the

same basis as for other eligible employees.

No change.

Pension

Pension allowance of 6.15% of salary (being the cash alternative to a 7% employer contribution

less the equivalent value of UK employers’ national insurance contributions). This is in line with

pension contributions provided for the wider workforce.

No change.

Annual bonus

Maximum opportunity is 200% of base salary (Chief Executive) and 175% of base salary

(Chief Financial Officer).

One-third of bonus is deferred into shares for three years, pursuant to the deferred share

bonus plan.

Malus and clawback provisions apply.

The Committee may, at its discretion, adjust the level of bonus payout if it considers

that the formulaic outcome was not aligned with performance in the year. As in previous

years a safety underpin applies such that the Committee may scale back the bonus earned

(including to zero) in the event that there is a safety event which it considers warrants the

use of such discretion.

Maximum will remain at 200% of base salary for the Chief Executive and at 175% of base

salary for the Chief Financial Officer.

The bonus for the 2024 financial year will be based 30% on PBT performance, 50%

on a balanced score card of Group performance targets including from ROCE, cost control

programme, customer feedback and operational performance and 20% on individual

performance including measures linked to sustainability, strategy, balance sheet strength

and employee engagement.

The actual performance targets set for FY24 remain commercially sensitive and will be

disclosed as appropriate in next year’s Directors Remuneration Report.

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DIRECTORS’ REMUNERATION POLICY (CONTINUED)

Summary of policy Implementation for FY24

Restricted Share Plan

Normal maximum awards of 125% of salary (Chief Executive) and 100% of salary

(Chief Financial Officer). Up to 150% of salary in exceptional circumstances.

Three-year performance period plus two-year post-vesting holding period.

Awards will be subject to performance underpins measured over the performance period.

Malus and clawback provisions apply.

The Committee may, at its discretion, adjust the vesting level of an award if it considers

that the vesting level would not reflect the underlying performance of the executive.

The normal maximum award will be 125% of salary for the Chief Executive and 100% of

salary for the Chief Financial Officer.

The underpins for 2024 awards are unchanged and will be:

> That easyJet does not fall below its minimum liquidity target through the performance period.

> Satisfactory governance performance including no Environmental, Social and Governance

(ESG) issues that result in material reputational damage to the Company (as determined

by the Board).

If the Company does not meet one or more of the underpins the Committee will consider

whether it is appropriate to scale back the level of payout under the award to reflect this.

The Committee will operate a further underpin such that if the Company’s performance,

taken as a whole, materially underperforms what might reasonably have been expected

for the sector for reasons attributable to management action or inaction, the Committee

will at its discretion reduce the award quantum appropriately.

Share ownership

guidelines

250% of salary (Chief Executive) and 200% of salary (Chief Financial Officer).

Required to retain 50% of post-tax shares vesting under the RSP and 100% of

post-tax deferred bonus shares until guideline is met.

No change.

Post-cessation share

ownership guidelines

Chief Executive and Chief Financial Officer required to hold up to 100% of their

shareholding requirement for two years after leaving office. Executive Directors will be

expected to maintain a minimum shareholding equal to the guideline (or their actual

shareholding if lower) for two years following stepping down as an Executive Director.

No change.

Non-Executive fees

The Chairman is paid an all-inclusive fee for all Board responsibilities.

The other Non-Executive Directors receive a basic Board fee, with supplementary fees

payable for additional responsibilities including Board or Committee responsibilities.

Fee levels are reviewed on a regular basis, and may be increased, taking into account

factors such as the time commitment of the role and market levels in companies of

comparable size and complexity.

The fees for the Chairman and Non-Executive Directors from 1 January 2024 will be

increased by 4% (with the exception of the SID fee which remains at its current level).

Fees from 1 January 2024 are summarised below:

January

2024

January

2023

Chairman £343,508 £330,296

Basic fee for other Non-Executive Directors £68,702 £66,060

Fees for SID role £25,000 £25,000

Chair of the Audit, Safety & Operational Readiness and

Remuneration Committees £16,380 £15,750

Chair of the Finance Committee £10,920 £10,500

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DIRECTORS’ REMUNERATION POLICY (CONTINUED)

ILLUSTRATION OF HOW MUCH THE EXECUTIVE DIRECTORS COULD EARN UNDER THE REMUNERATION POLICY

The charts below show how much the Chief Executive and Chief Financial Officer could earn through

easyJet’s Remuneration Policy under different performance scenarios in the 2024 financial year. The

following assumptions have been made:

Minimum (performance below threshold) – fixed pay only, with no vesting under any of easyJet’s

incentive plans.

Mid (performance in line with expectations) – fixed pay plus a bonus at the mid-point of the range

(giving 50% of the maximum opportunity), plus 100% vesting of the RSP.

Maximum (performance meets or exceeds maximum) – fixed pay plus maximum bonus, plus 100%

vesting of the RSP.

Maximum plus 50% increase in share price (performance meets or exceeds maximum) – fixed pay plus

maximum bonus, 100% vesting of the RSP and easyJet’s share price increases by 50%.

Fixed pay comprises:

Salaries – salary effective as at 1 January 2024.

Benefits – amount received in the 2023 financial year.

Pension – employer contributions or cash-equivalent payments receivable in the 2024 financial year.

Other – Matching Shares under the all-employee Share Incentive Plan (SIP), if applicable.

The scenarios shown above do not include any dividend assumptions. It should be noted that since the

analysis above shows what could be earned by the Executive Directors based on the Remuneration

Policy described above, these numbers will differ to values included in the table on page 121 detailing the

actual earnings by Executive Directors.

Chief Executive (Johan Lundgren)

Fixed

Annual bonus

RSP

Chief Financial Officer (Kenton Jarvis)

£911,089

£811,200 £1,014,000

Minimum

Mid

Maximum

Maximum with 50% share price increase

£911,089

£2,7 36,289

£3,547,489

£4,054,489

£911,089

£1,622,400

£1,014,000

£1,521,000

£615,178

£500,500 £572,000

Minimum

Mid

Maximum

Maximum with 50% share price increase

£615,178

£1,687,678

£2,188,178

£2,474,178

£615,178

£1,001,000

£572,000

£858,000

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DIRECTORS’ REMUNERATION REPORT

SINGLE TOTAL FIGURE OF REMUNERATION FOR THE YEAR ENDED 30 SEPTEMBER 2023

The table below sets out the amounts earned by the Directors (audited).

£’000

Fees and salary Benefits

Bonus

LTI P

Pension

Other

Total Total fixed Total variable

2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2022 2023 2022 2023 2022 2023 2022

Executive Directors:

Johan Lundgren 770 740 50 47 1,326 1,201 0 0 48 46 – 2,194 2,034 868 833 1,326 1,201

Kenton Jarvis 542 520 8 8 818 738 0 0 34 32 300 1,402 1,598 584 860 818 738

Non-Executive Directors:

Stephen Hester 326 273 – – – – – – – – – 326 273 326 273 – –

Dr Andreas Bierwirth

28 78 – – – – – – – – – 28 78 28 78 – –

Catherine Bradley CBE 76 73 – – – – – – – – – 76 73 76 73 – –

Sue Clark

53 – – – – – – – – – – 53 – 53 – – –

Ryanne van der Eijk 65 5 – – – – – – – – – 65 5 65 5 – –

Harald Eisenächer 65 5 – – – – – – – – – 65 5 65 5 – –

Moni Mannings 81 78 – – – – – – – – – 81 78 81 78 – –

David Robbie 75 63 – – – – – – – – – 75 63 75 63 – –

Julie Southern

38 103 – – – – – – – – – 38 103 38 103 – –

Dr Detlef Trefzger 75 5 – – – – – – – – – 75 5 75 5 – –

1) Benefits relate to the cost to the Company of life assurance and other insurance of £27,641, together with reimbursements for business-related travel expenses in respect of domestic car travel to the value of £22,713 made to the Chief Executive and

the cost to the Company of life assurance and other insurance of £7,616 for the Chief Financial Officer.

2) One-third of the annual bonus is deferred in shares for a period of three years. There are no performance conditions attached to the deferred elements. The award is subject to continued employment.

3) Johan Lundgren and Kenton Jarvis received a cash alternative to pension contributions equivalent to 6.15% of base salary. No Director who served during the year accrued any other pension benefits.

4) Sue Clark joined the Board on 1 March 2023.

5) Dr Andreas Bierwirth and Julie Southern stepped down from the Board on 9 February 2023.

6) Payment of £300,000 for cash buy-out awards, disclosed in the FY21 Annual Report, paid to Kenton Jarvis in December 2021.

7) Represents the value of the 2019 and 2020 LTIP awards that both lapsed in 2022 and 2023 (as disclosed in the FY22 Remuneration Report and later in this report). Last year the table included the value of RSP awards granted in the year, which for

Johan Lundgren was £925,000 and for Kenton Jarvis £520,000. In line with regulations and typical market practice this has been updated so that the RSP awards will only be included in the single total figure when the performance underpins have

been assessed.

PAYMENTS FOR LOSS OF OFFICE AND PAYMENTS TO PAST DIRECTORS (AUDITED)

There were no payments for loss of office or payments to past directors.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

ANNUAL BONUS OUTTURN FOR PERFORMANCE IN THE 2023 FINANCIAL YEAR (AUDITED)

The measures selected for the FY23 annual bonus aligned with our key priorities for the year and were:

30% on EBITDAR performance; 50% on a balanced score card of Group performance targets including

free cash flow, cost control, customer feedback and operational performance; and 20% on individual

performance including measures linked to sustainability, strategy and employee engagement.

The Committee has chosen to use a balanced scorecard approach to assessing performance for 50% of

the bonus this year to ensure that we are providing a balanced incentive to drive performance across a

range of areas. At least 40% of the scorecard was linked to financial measures ensuring that at least 50%

of the overall bonus is linked to financial measures.

The Committee reviewed performance against these measures including the balanced scorecard and it

was determined that the bonus would pay out at 85% of maximum. The Committee also had the

discretion to determine the appropriate level of award at the end of the financial year based on

performance achieved. The Committee felt the performance of the Executive Directors had been

particularly strong in the year with excellent progress made towards a number of key financial and

strategic objectives.

Measure

FY23 Ta rgets

Weighting

CEO and

CFO

Threshold

(10%

minimum

award)

On target

(50% award)

Maximum

(100% award) Outcome Payout

EBITDAR (at constant

currency) £ million

30% 890 989 1,088 1,099 100%

Balanced scorecard 50%

Cost programme

performance £ million 100 110 120 131 70%

Free cash flow £ million

419 480 541 569

Customer satisfaction 72.9% 74.9% 76.9% 73.1%

On time performance -1 Industry

average

+1 0.3

Individual 20% n/a 50% 100% Fully achieved 100%

Tota l 100% 85%

1) Free cash flow targets were adjusted to reflect aircraft purchases during the year which were not included in the original

target to ensure performance is assessed on a comparable basis.

Overall, FY23 was a very successful year for easyJet with record performance during summer 2023 and a large

increase in profit compared to the previous year, despite the challenges arising from the external operational

environment and high fuel costs.

It was in this context that it was felt the overall outcome was appropriate in the context of performance in the

year and no discretion was applied.

The Committee considered the individual performance of the Executive Directors against their the individual

objectives as well as their broader contribution to the business during the year and determine that is portion of

the bonus should payout in full (see below).

As a result of this assessment and the Group performance achieved, the final bonuses agreed were £1,326,000

for Johan Lundgren (85% of maximum), and £818,125 for Kenton Jarvis (85% of maximum) of which one-third will

be awarded in shares deferred for three years.

PERSONAL OBJECTIVES (20% WEIGHTING) (AUDITED)

This component focuses on personal performance against the priorities set by the Board for the

Executive Directors in 2023. The Remuneration Committee considers their performance holistically in

relation to the development and driving of strategy, financial performance, sustainability, customer and

people initiatives (both what was delivered and how). The assessment for each Executive Director was as

shown in the following tables:

Johan Lundgren (CEO)

The Committee assessed performance against the objective focus areas set out below and determined

that the personal objectives element had been met in full. Details of performance against these

objective focus areas is provided below.

Focus Area Outcomes and Evidence

Strategy – Setting,

communicating, and leading the

company strategy to deliver

long-term value.

> Successful rollout of refreshed strategy across business.

> Strong Revenue Per Seat outcomes with highest ever summer

performance .

> Customer communications strategy agreed and progressing in

implementation.

> Clear progress in key IT strategic programmes.

ESG – Taking an industry lead

on sustainability through

delivering on our net zero

ambition whilst developing

capability, inclusion, diversity,

and talent to underpin the

strategy delivery.

> Improved ESG performance evidenced through ratings scores and

external assessment.

> Continued successful delivery against net zero roadmap.

> Championed successful rollout of Centre of Inclusive Leadership

programmes to AMB, L50 and L350 with strategy for future DEI

activity agreed with the Board.

> Leading a focus on gender diversity to achieve and improve upon

targets set.

Operational resilience – To

ensure that the operation is well

planned, properly resourced,

robust and resilient to meet

customer expectations.

> Pilot and cabin crew establishment targets all achieved for S23

operations.

> Third party ground handling establishment targets achieved.

> All training completed according to plan, with no training delays.

> Additional resilience added with crew slipping, firebreaks, standby

crew optimization .

People and employee

engagement – To lead a

continued improvement in

employee engagement scores

through the anticipation and

implementation of agreed

actions and initiatives.

> Consistent outcomes achieved in Your Voice Matters employee

engagement survey and improved participation.

> Strong M&A engagement score in upper quartile of benchmark.

> Strategic engagement plans in place for pilots and cabin crew with

cross divisional working group established.

> Promises and behaviours launched with management teams.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

Kenton Jarvis (CFO)

The Committee assessed performance against the objective focus areas set out below and determined

that the personal objectives element had been met in full. Details of performance against these

objective focus areas is provided below.

Focus Area Outcomes and Evidence

ESG – Taking an industry lead

on sustainability through

delivering on our net zero

ambition whilst developing

capability, inclusion, diversity,

and talent to underpin the

strategy delivery.

> Improved ESG performance evidenced through ratings scores and

external assessment.

> Continued successful delivery against net zero roadmap.

> DPO accelerated, no wet leases, accelerated NEO deliveries led to

FY23 CO

RPK better than net zero roadmap.

Governance – Continue to

deliver on control improvement

plan in Group Financial Control

(GFC).

> Strong improvements in control environment achieved.

> COSO framework advanced.

> Implemented software to allow monitoring of reconciliations .

Strategy – Leading the

company strategy to deliver

long-term value.

> Cost savings program delivered above budget.

> Fleet plan prepared with shortfalls managed.

> Enhanced profitability analysis used for all country deep dives.

Funding/balance sheet

– Generate and maintain strong

liquidity above policy thresholds

for lowest P&L cost.

> Year-end liquidity in place exceeding internal policy.

> New UKEF facility renegotiated delivering in excess of target

savings, whilst protecting liquidity.

> Repayment of Feb-16 €500 million Eurobond in the year, as well

as the repayment of the Oct-16 €500 million Eurobond after the

year end.

> Balance sheet principles paper presented at Finance Committee,

culminating in capital allocation framework presented at year-end

trading statement.

> Credit card acquirer agreements renegotiated improving

commercial terms and conditions.

People and employee

engagement – To lead a

continued improvement in

employee engagement scores

through the anticipation and

implementation of agreed

actions and initiatives.

> Improved engagement scores achieved in Finance through delivery

of engagement initiatives.

> Retention improved to target level.

Gender diversity – To support

the delivery of the gender

diversity targets.

> Support provided to achieved corporate gender targets.

> Actions taken to support a stronger recruitment pipeline of female

candidates.

LONG TERM INCENTIVE PLAN (AUDITED)

Given the continued external uncertainty when awards were made in 2020, it was decided that the

previous approach for the LTIP of setting a mix of three-year financial targets would not be fair and could

result in either unduly difficult or easy targets driven by external events rather than management action.

The Committee’s view was that in the circumstances, shareholder alignment is a key measure of success

where management will benefit if shareholders do and vice versa.

It was therefore decided when the 2020 LTIP award was granted that it would be based 100% on TSR

performance compared to FTSE 51–150 companies measured over the three financial years prior to

vesting (with a minimum positive TSR underpin).

The percentage which could be earned was determined using the following vesting schedule:

Below

threshold

(0% vesting)

Threshold

(25% vesting)

On target

(50% vesting)

Maximum

(100%

vesting) Actual

Vesting

(% of

element)

TSR awards (100% of total) < Median Median n/a Upper

quartile

Below

median

TSR performance was below threshold over the performance period. The Committee considered this

outcome and determined that no payment was an appropriate outcome, so no discretion was applied.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

EXECUTIVE DIRECTORS’ SHARE AWARDS OUTSTANDING AT THE FINANCIAL YEAR END (AUDITED)

Details of share options and share awards outstanding at the financial year end are shown in the following tables:

Johan Lundgren

Scheme

No. of shares/options

at 1 October 2022

Shares/options

granted in year

Shares/options

lapsed in year

Shares/options

exercised in year

No. of shares/options

at 30 September

2023

Date of grant

Exercise price

(£)

Market price on

exercise date

(£)

Date from which

exercisable Expiry date

153,770 – (153,770) – – 19 Dec 2019

– – 19 Dec 2022 19 Dec 2029

254,621 – – – 254,621 29 Dec 2020

– – 29 Dec 2023 29 Dec 2030

129,334 – – – 129,334 16 Feb 2022

– – 19 Dec 2024 16 Feb 2032

– 241,136 – – 241,136 12 Dec 2022

– – 12 Dec 2025 12 Dec 2032

36,775 – – – 36,775 19 Dec 2018 – – 19 Dec 2021 19 Dec 2028

6,273 – – – 6,273 19 Dec 2019

– – 19 Dec 2022 19 Dec 2029

– 104,331 – – 104,331 12 Dec 2022

– – 12 Dec 2025 12 Dec 2032

1,865 – 1,865 – – 14 Jun 2019

6.75 – 1 Aug 2022 1 Feb 2023

Kenton Jarvis

Scheme

No. of shares/options

at 1 October 2022

Shares/options

granted in year

Shares/options

lapsed in year

Shares/options

exercised in year

No. of shares/options

at 30 September

2023

Date of grant

Exercise price

(£)

Market price on

exercise date

(£)

Date from which

exercisable Expiry date

159,803 – – – 159,803 20 May 2021

– – 29 Dec 2023 20 May 2031

72,706 – – – 72,706 16 Feb 2022

– – 19 Dec 2024 16 Feb 2032

– 135,557 – – 135,557 12 Dec 2022

– – 12 Dec 2025 12 Dec 2032

– 64,149 – – 64,149 12 Dec 2022

– – 12 Dec 2025 12 Dec 2032

1,963 – – – 1,963 20 Jul 2021

6.42 – 1 Sep 2024 1 Mar 2025

1.353 – – – 1,353 19 Jul 2022

3.99 – 1 Sep 2025 1 Mar 2026

Key:

LTI P

Deferred Share Bonus Plan (DSBP)

RSP

Save As You Earn Awards (SAYE)

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

The closing share price of the Company’s ordinary shares at 30 September 2023 was £4.27 and the

closing price range during the year ended 30 September 2023 was £2.85 to £5.28.

Note 1: Number of share awards granted

The number of shares is calculated according to the scheme rules of individual plans based on the

middle-market closing share price on the day prior to grant.

Note 2: Long Term Incentive Plan awards made in December 2019

The targets were not met at the end of the three-year performance period and as a result the award did

not vest.

Note 3: Long Term Incentive Plan awards made in December 2020

The targets were not met at the end of the three-year performance period and as a result the award

will not vest.

Note 4: Long Term Incentive Plan award made in May 2021

The targets were not met at the end of the three-year performance period and as a result the award

will not vest.

Note 5: Restricted Share Plan awards made in February 2022

The RSP awards made in February 2022 relate to the performance period from 1 October 2021 to

30 September 2024 and, subject to the underpins being met, the awards will vest on 19 December 2024.

Awards were made in line with the approval of the new Directors Remuneration Policy and Restricted

Share Plan rules at the AGM in February 2022 and are treated as having been granted on the normal

grant date of 19 December 2021 for the purposes of Provision 36 of the Corporate Governance Code.

The face value of the award granted to Johan Lundgren was £925,000 (125% of salary) and for Kenton

Jarvis £520,000 (100% of salary). This was based on the middle-market closing share price on the day

prior to grant, being £7.15. The award were granted as nil cost options and are subject to the following

underpins: that easyJet does not fall below its minimum liquidity target through the three-year

performance period; and that there is satisfactory governance performance including no ESG issues that

result in material reputational damage to the Company (as determined by the Board). The Committee

will operate a further underpin such that if the Company’s performance, taken as a whole, materially

underperforms what might reasonably have been expected for the sector for reasons attributable to

management action or inaction, the Committee will at its discretion reduce the award quantum

appropriately.

Note 6: Restricted Share Plan awards made in December 2022

The face value of the award granted to Johan Lundgren was £925,000 (125% of salary) and for Kenton

Jarvis £520,000 (100% of salary). This was based on the middle-market closing share price on the day

prior to grant, being £3.84. The awards were granted as nil cost options and are subject to the following

underpins: that easyJet does not fall below its minimum liquidity target through the three-year

performance period; and that there is satisfactory governance performance including no ESG issues that

result in material reputational damage to the Company (as determined by the Board).

The Committee will operate a further underpin such that if the Company’s performance, taken as a

whole, materially underperforms what might reasonably have been expected for the sector for reasons

attributable to management action or inaction, the Committee will at its discretion reduce the award

quantum appropriately.

Subject to the underpins being met, the awards will vest on 12 December 2025.

Note 7: Deferred Share Bonus Plan award made in December 2019

The face value of the award granted to Johan Lundgren was £75,481 and relates to the deferral into

shares of one-third of the bonus paid in 2019. This was based on the middle-market closing share price

on the day prior to grant, being £14.29. The award was granted as nil-cost options and is not subject to

performance conditions, but is subject to continued employment.

Note 8: Deferred Share Bonus Plan awards made in December 2022

The face value of the award granted to Johan Lundgren was £400,217 and for Kenton Jarvis £246,079

and relates to the deferral into shares of one-third of the bonus paid in 2022.This was based on the

middle-market closing share price on the day prior to grant, being £3.84. They were granted as nil-cost

options and are not subject to performance conditions, but are subject to continued employment.

Note 9: Save As You Earn awards

Executive Directors are eligible to participate in the SAYE on the same terms as all other UK-based

colleagues of the Company. Options are granted under the SAYE, which, in the UK, is an HMRC tax-

advantaged plan. Participants contract to save up to the equivalent of £350 per month over a period of

three years. Under the applicable plan rules the maximum permitted monthly saving, across all SAYE

plans is £500.

As is usual market practice, the option price for SAYE awards is determined by the Committee in

advance of the award by reference to the share price following announcement of the half-year results

the day immediately preceding the date the invitations are sent.

In common with most plans of this type, there are no performance conditions applicable to options

granted under the SAYE.

Johan Lundgren’s 2019 SAYE option lapsed during the year without being exercised.

SHAREHOLDING GUIDELINES IN THE 2023 FINANCIAL YEAR (AUDITED)

The Chief Executive and Chief Financial Officer are expected to build up a shareholding of 250% and 200%

of salary respectively over the first five years from appointment to the Board. The Committee noted the

level of shareholding for Johan Lundgren in the context of his time as CEO and that he is currently below

his shareholding requirement. Given the level of vesting outcomes over a challenging period since his

appointment, the Committee is satisfied that Johan is continuing to build his shareholding to an

appropriate level in the circumstances. The Committee also notes that the Executive Directors are required

to retain a minimum of 50% of net vested shares from the LTIP and RSP and 100% of net vested deferred

bonus shares until the guidelines are met. This will be kept under review on an ongoing basis.

The Non-Executive Directors, including the Chair of the Board, are required to build up a shareholding

of 100% of annual fees over a period of five years from appointment. Details of their holdings are set

out below.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

DIRECTORS’ CURRENT SHAREHOLDINGS (AUDITED)

The following table provides details on current Directors’ interests in shares at 30 September 2023 (unless otherwise noted).

Interests in share

schemes

Unconditionally

owned shares

Shareholding

guidelines achieved

Deferred bonus

LTIP

RSP

SAYE

SIP

Total in share

schemes

Stephen Hester 120,000 100% – – – – – –

Johan Lundgren 66,713 37% 147, 3 7 9

254,621 370,470 – – 773,015

Kenton Jarvis 15,819 21% 64.149 159,803 208,263 3,316 – 435,531

Catherine Bradley CBE 6,000 38% – – – – – –

Sue Clark

17,28 1 84% – – – – – –

Ryanne van der Eijk 15,670 100% – – – – – –

Harald Eisenächer 14,500 90% – – – – – –

Moni Mannings 6,990 48% – – – – – –

David Robbie 16,596 100% – – – – – –

Dr Detlef Trefzger 20,000 100% – – – – – –

1) Includes SIP Partnership Shares, vested SIP Performance (Free) Shares, vested SIP Matching Shares, and any shares owned by connected persons.

2) Based on the shareholding guidelines and including unconditionally owned shares and for the Executive Directors, the post tax value of vested but unexercised share interests under the DSBP. The extent to which the guidelines have

been achieved is calculated based on the price at purchase or vesting; therefore, the values will be different for each director base on their purchase history.

3) DSBP shares are granted in the form of nil cost options and are not subject to performance conditions.

4) LTIP/RSP shares are granted in the form of nil cost options subject to performance. As per the disclosure on p. 126, outstanding LTIP awards are due to lapse.

5) SAYE are granted as options.

6) Consists of unvested SIP Performance (Free) Shares and unvested SIP Matching Shares. Last award made in 2019.

7) Joined Board on 1 March 2023.

8) The number of shares for Johan Lundgren includes 36,755 vested but not exercised options, awarded under the DSBP in December 2018 and 6,273 vested but not exercised options, awarded under the DSBP in December 2019.

Between the 30 September 2023 and the date of this report, the only change to the above holdings is the purchase of 73 partnership shares under the Buy As You Earn (SIP) scheme for Kenton Jarvis. There have

been no other changes.

Executive Directors are deemed to be interested in the unvested shares held by the easyJet Share Incentive Plan Trust and the easyJet plc Employee Benefit Trust.

At 30 September 2023, the unvested ordinary shares held in the Trusts were as follows:

Number of

ordinary shares

easyJet Share Incentive Plan Trust 0

easyJet plc Employee Benefit Trust 4,915,387

Tota l 4,915,387

Changes since the year end: as at 28 November 2023, there was no change to the easyJet Share Incentive Plan Trust balance and the easyJet plc Employee Benefit Trust held 4,914,159 shares.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

DILUTION LIMITS

easyJet complies with the Investment Association’s Principles of Remuneration with regard to dilution

limits.

EMPLOYEE SHARE PLAN PARTICIPATION

A key component of easyJet’s reward philosophy is to provide share ownership opportunities throughout

the Group by making annual awards of performance-related shares to all eligible employees, when

necessary financial targets are achieved. In addition, easyJet operates a voluntary discounted share

purchase arrangement for all employees via a Save As You Earn scheme and a Buy As You Earn

arrangement with matching shares in the UK under the tax-approved SIP. A 20% discount was offered on

Save As You Earn 2023; however, Matching Shares remain suspended.

DETAILS OF DIRECTORS’ SERVICE CONTRACTS AND LETTERS OF APPOINTMENT

Details of the service contracts and letters of appointment in place as at 30 September 2023 for

Directors are as follows:

Date of appointment

Date of current service

contract Unexpired term at 30 September 2023

Stephen Hester 1 September 2021 20 August 2021

Executive Directors are subject

to a 12-month notice period.

Letters of appointment for the

Non-Executive Directors do

not contain fixed-term periods;

however, they are appointed

in the expectation that they

will serve for a maximum of

nine years, subject to

satisfactory performance and

re-election at AGMs.

Johan Lundgren 1 December 2017 10 November 2017

Kenton Jarvis 3 February 2021 15 September 2020

Catherine Bradley CBE 1 January 2020 9 December 2019

Sue Clark 1 March 2023 4 January 2023

Ryanne van der Eijk 1 September 2022 22 August 2022

Harald Eisenächer 1 September 2022 22 August 2022

Moni Mannings 6 August 2020 5 August 2020

David Robbie 17 November 2020 16 November 2020

Dr Detlef Trefzger 1 September 2022 22 August 2022

REVIEW OF PAST PERFORMANCE

The chart sets out the TSR performance of the Company relative to the FTSE 250, FTSE 100,

and a group of European airlines

since 30 September 2013. The FTSE 100 and FTSE 250 were chosen

as easyJet has been a member of both indices during the period.

This graph shows the value, by 30 September 2023, of £100 invested in easyJet on 30 September 2013,

compared with the value of £100 invested in the FTSE 100 and FTSE 250 Indices or a comparator group

of airlines on the same date.

The other points plotted are the values at intervening financial year ends. Overseas companies have

been tracked in their local currency, i.e. ignoring exchange rate movements since 30 September 2013.

300

250

200

150

100

Sep 13 Sep 14

easyJet

Sep 15 Sep 16 Sep 17 Sep 18 Sep 19 Sep 20 Sep 21 Sep 22 Sep 23

FTSE 100 index FTSE 250 index Comparator airlines

1) Lufthansa, Ryanair, Air France-KLM and Wizz Air have all been included in the comparative European airlines group. Wizz

Air has been tracked from listing.

CHIEF EXECUTIVE TOTAL REMUNERATION TABLE

The table below shows the total remuneration figure earned for the Chief Executive over the same

10-year period. The total remuneration figure includes the annual bonus and LTIP awards which vested

based on performance in those years.

The annual bonus and LTIP vesting percentages show the payout for each year as a percentage

of the maximum.

2014 2015 2016 2017 2018

2019 2020 2021 2022 2023

Single total

figure of

remuneration

(£’000)

Johan

Lundgren

– – – – 1,500 1,006 755

794 2,034

2,194

Carolyn

McCall

9,209

6,241

1,453

757 125 – – – –

–

Annual bonus

(%)

Johan

Lundgren

– – – – 73% 16% 0% 0% 81%

85%

Carolyn

McCall

76% 66% 13% 0% – – – – –

–

LTIP

vesting (%)

Johan

Lundgren

– – – – – – 0% 0% 0%

Carolyn

McCall

100% 100% 32% 0% – – – – –

–

1) This amount is after the voluntary 20% reduction in base salary during April, May and June 2020.

2) Johan Lundgren was appointed to the Board on 1 December 2017 and Carolyn McCall stepped down from the Board

on 30 November 2017.

3) Includes 48,509 LTIP shares (inclusive of dividend equivalents) at the vesting date share price of £10.43, a decrease

of 30% on the share price at grant of £14.99.

4) Includes 266,899 LTIP shares vesting for the period; share price is £17.15 (the actual share price at vesting), an increase

of 133% on the share price at grant of £7.37.

5) Includes 445,575 LTIP shares vesting for the period; share price was £16.71 (the actual share price at vesting), an increase

of 325% on the share price at grant of £3.93.

6) Last year the LTIP value for FY22 included the value of RSP awards granted in the year, which for Johan Lundgren was

£925,000. In line with regulations and typical market practice this has been updated so that the RSP awards will only be

included in the single total figure when the performance underpins have been assessed.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

CHANGE IN DIRECTORS’ PAY FOR THE YEAR

The table below shows the year-on-year percentage change in pay for the Directors, compared to the average earnings of all other easyJet UK colleagues.

2023 2022 2021 2020

Salary Benefits

Annual bonus Salary Benefits Annual bonus Salary Benefits Annual bonus Salary Benefits Annual bonus

Executive Directors

Johan Lundgren 4.1% 6.4% 10.4% 0% 4 87. 5% n/a 6.0% -43% n/a -2.6% 0% -100%

Kenton Jarvis

4.2% 0% 10.8% 52.0% n/a n/a n/a n/a n/a – – –

Non-executive Directors

Stephen Hester

19.4% – – n/a – – n/a – – – – –

Catherine Bradley

4.1% – – – – – 62.2% – – n/a – –

Sue Clark

n/a – – n/a – – – – – – – –

Ryanne van der Eijk

1200% – – n/a – – – – – – – –

Harald Eisenächer

1200% – – n/a – – – – – – – –

Moni Mannings

3.8% – – – – – 680% – – n/a – –

David Robbie

19.0% – – 21.2% – – n/a – – – – –

Dr Detlef Trefzger

1400% – – n/a – – – – – – – –

Colleagues

Average pay based on easyJet’s UK colleagues

7.0% 0% 0% 1.9% 0% n/a 0% 0% n/a 2.0% 0% -100%

n/a refers to a nil value in the previous year, meaning that the year-on-year change cannot be calculated.

1) Appointed Executive Director on 3 February 2021.

2) Appointed to the Board on 1 September 2021 and Chair from 1 December 2021.

3) Appointed to the Board on 1 January 2020.

4) Appointed to the Board on 1 March 2023.

5) Appointed to the Board on 1 September 2022.

6) Appointed to the Board on 6 August 2020.

7) Appointed to the Board on 17 November 2020.

8) There are no colleagues in easyJet plc; therefore, the Committee decided to use the average for all UK colleagues as the appropriate comparator group given they comprise over 50% of total colleagues and therefore this is considered to be the

most representative for comparison. There was an average change in pay of 7% in FY23 for UK colleagues.

9) Benefits relate to the cost to the Company of life assurance and other insurance, as well as reimbursements made to the Chief Executive for business-related travel expenses in respect of domestic car travel.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

RELATIVE IMPORTANCE OF SPEND ON PAY

The table below Illustrates the relative importance of the spend on pay showing the total pay for all

easyJet’s colleagues compared to the distributions to shareholders in the year and the percentage

change in the year ended 30 September 2023. No dividends were paid in the past financial year and

other reported key financial indicators are included for further points of reference including information

on the number of colleagues in the year, the reported total revenue and the reported profit. For further

information the majority of easyJet’s colleagues (around 90%) perform flight and ground operations,

with the rest performing administrative and managerial roles.

Year ended

30 September

2023

Year ended

30 September

2022 Change %

Colleague costs (£ million) 1,130 948 19%

Ordinary dividend (£ million) 0 0 –

Average monthly number of colleagues 15,937 13,951 14%

Revenue (£ billion) 8.2 5.8 41%

Headline (loss)/profit before tax (£ million) 455 (178) 356%

CHIEF EXECUTIVE PAY RATIO

The table below sets out the Chief Executive pay ratio as at 30 September 2023. The report will build up

over time to show a rolling 10-year period. The ratios compare the single total figure of remuneration of

the Chief Executive with the equivalent figures for the lower quartile (P25), median (P50) and upper

quartile (P75) colleagues.

We have used the ‘Option A’ methodology which uses actual earnings for the Chief Executive and UK

colleagues over the financial year to provide the most accurate comparison. The total FTE remuneration

paid during the year for each colleague in each of the groups was then calculated, on the same basis as

the information set out in the single figure table for the Chief Executive on page 121.

In calculating the figures, the following considerations were made:

> The single total figure of remuneration of our UK colleagues was calculated as at 30 September 2023.

> Annual bonus will be paid in relation to the year ended 30 September 2023.

> For participating employees in the LTIP/RSP, the value of awards that vest in relation to the year ended

30 September 2023 have been included.

> Earnings for those who are part-time or joined during the year have been annualised on an FTE basis.

This data then identified those employees at the 25th, 50th (median) and 75th percentile points.

Year Method

25th

percentile

pay ratio

Median pay

ratio

75th

percentile

pay ratio

2020 Option A 30:1 23:1 12:1

2021 Option A 27:1 21:1 10:1

2022

Option A 75:1 56:1 24:1

2023 Option A 74:1 57:1 27:1

2023 Total pay and benefits £29,640 £38,340 £82,719

2023 Salary £16,235 £20,958 £65,707

1) In line with regulations and typical market practice the total figure for the CEO shows the value of the LTIP on vesting

(which lapsed this year and last). Last year the calculation included the value of the RSP awards granted in the year,

however, the value of the RSP will be shown within the CEO’s total single figure after the peformance underpins have

been assessed The FY22 calcuation has been updated accordingly and therefore changed the overall ratios.

Unlike the total remuneration for the majority of colleagues, total remuneration for the Chief Executive is

mostly dependent on business performance and share price movements over time. As a result, the ratios

may fluctuate significantly from year to year. For example, no bonus was paid in 2020 or 2021 but was

paid in 2022 and will be paid in 2023. This is a significant portion of the Chief Executive’s total

remuneration in 2022 and 2023 and this is reflected in the pay ratio. The Committee has agreed that the

ratio reflects easyJet’s wider policies on pay and reward in line with market, experience and skills.

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DIRECTORS’ REMUNERATION REPORT (CONTINUED)

STATEMENT OF SHAREHOLDERS’ VOTING AT AGM

The table below provides details of shareholder voting in respect of the Directors’ Remuneration Policy

(approved in February 2022), and the Annual report on remuneration (in February 2023).

Policy

(February 2022 AGM)

Annual report on

remuneration

(February 2023 AGM)

Votes cast in favour 186,561,503 73.38% 197,315,595 80.59%

Votes cast against 67,6 87,41 2 26.62% 47,513,517 19.41%

Total votes cast in favour or against 254,248,915 100% 244,829,112 100%

Votes withheld 19,999,292 – 12,053,532 –

We were pleased that the Remuneration Report passed at the 2023 AGM with a vote of 81% in favour;

however, we are also mindful that some shareholders voted against the resolution. The Committee is

aware that some shareholders were either uncomfortable with the level of incentive payout in the year,

or do not support the use of an RSP over an LTIP.

The Committee believes that the performance achieved in FY22 against the financial measures was

strong in a highly unpredictable environment, and that the downwards discretion applied to the bonus

outcome at the time resulted in a fair outcome taking into account the experience of customers and our

shareholders. The Committee remains satisfied that the current bonus and RSP structure supports the

business and long-term strategic decision making.

We also note that some shareholders voted against the resolution for the Remuneration Policy in 2022

with not all supportive of the proposed RSP structure. The Remuneration Committee undertook a

thorough review of remuneration arrangements prior to the AGM, including consulting with major

shareholders and employee representatives, and concluded that replacing the LTIP with a Restricted

Share Plan was the best approach going forward. The Board believes that the updated Remuneration

Policy will not only support long term strategic decision-making and help retain and motivate

management to drive the performance of the business but will also support the longer term

performance of the business including delivering sustainable shareholder value.

ADVISERS TO THE REMUNERATION COMMITTEE

The Remuneration Committee is advised by Deloitte which was appointed by the Committee in 2021

following an independent review process. Deloitte advises the Committee on developments in executive

pay and on the operation of easyJet’s incentive plans. Other than to the Committee, advice is also

provided to easyJet in relation to, for example, senior management pay practices and the fees of the

Non-Executive Directors. Total fees (excluding VAT) paid to Deloitte in respect of services to the

Committee during the 2023 financial year were £70,500, based on time and materials. Deloitte is a

founding member of the Remuneration Consultants Group and a signatory to its Code of Conduct.

Any advice received is governed by that code. Deloitte LLP also provided strategic and technology

consulting and wider risk advisory and assurance services to the Company during the year.

The Committee is satisfied that the Deloitte engagement team, which provides remuneration advice

to the Committee, does not have connections with easyJet plc or its Directors that may impair its

independence. The Committee has reviewed the operating processes in place at Deloitte and is satisfied

that the advice it receives is independent and objective.

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OTHER DISCLOSURES

Directors’ appointment and retirement

The Directors may from time to time appoint one

or more Directors. Any such Director shall hold

office only until the next AGM and shall then be

subject to appointment by the Company’s

shareholders.

It is the current intention that at the Company’s

next AGM all Executive and Non-Executive

Directors will retire and offer themselves for

election or re-election. Further information is set

out in the Governance section on page 86.

Directors’ conflicts of interest

Directors have a statutory duty to avoid situations

in which they have, or may have, interests that

conflict with those of easyJet, unless that conflict

is first authorised by the Board. The Company has

in place procedures for managing conflicts of

interest. The Company’s Articles of Association

also contain provisions to allow the Directors to

authorise potential conflicts of interest so that a

Director is not in breach of his or her duty under

company law. Should a Director become aware

that he or she has an interest, directly or indirectly,

in an existing or proposed transaction with

easyJet, he or she should notify the Board in line

with the Company’s Articles of Association.

Directors have a continuing duty to update any

changes to their conflicts of interest.

Directors’ indemnities

Directors’ and officers’ insurance cover has been

established for all Directors to provide appropriate

cover for their reasonable actions on behalf of the

Company. A deed was executed in 2007

indemnifying each of the Directors of the

Company and/or its subsidiaries as a supplement

to the Directors’ and officers’ insurance cover.

The indemnities, which constitute a qualifying

third-party indemnity provision as defined by

section 234 of the Companies Act 2006, were

in force during the 2023 financial year and remain

in force for all current and past Directors of the

Company.

The Directors present their Annual Report and

Accounts together with the audited consolidated

financial statements for the year ended

30 September 2023. This Directors’ Report and

the strategic report, which includes the trends and

factors likely to affect the future development,

performance and position of the business and a

description of the principal risks and uncertainties

of the Group (which can be found on pages 61 to

66 and are incorporated by reference), collectively

comprise the management report as required

under the Disclosure Guidance and Transparency

Rules (DTRs).

RESULTS AND DIVIDEND

The profit for the financial year after taxation

amounts to £324 million (last year: loss of

£169million).

The Board are recommending a dividend

of4.5pence per ordinary share, amounting to

£34million and representing approximately 10%

ofheadline profit after tax.

The dividend is subject to shareholder approval

at the Company’s Annual General Meeting (AGM)

to be held on 8 February 2024 and will be

payable on 22 March 2024 to those shareholders

on the register at the close of business on

23 February 2024.

The Board is committed to maintaining regular

returns to shareholders, with the level of future

returns to be assessed over the coming years,

taking into account market conditions, capex

requirements and progress towards the Group’s

new medium-term targets.

BOARD

Directors and their interests

Details of the Directors who held office at the end

of the year and their biographical details are set

out on pages 89 to 91. Changes to the Board

during the year and up to the date of this report

are set out on page 84. The Directors’ interest in

the ordinary shares and options of the Company

are disclosed within the Directors’ Remuneration

Report on pages 113 to 130.

DIVERSITY

The Board values diversity and recognises that

having an appropriate mix of skills and experience

is critical to ensure the future success of our

business.

The Company has met the FTSE Women Leaders

target of having 40% women on Boards (2023:

40%), and is targeting having 40% women in the

Airline Management Board (Executive Committee)

and their direct reports by 2025 (2023: 30%).

The Company has also met the following FCA

Diversity Targets (as required by Listing Rule 9.8.6):

> at least 40% of the Board being women

(2023: 40%)

> at least one of the senior Board positions being

a woman (2023: Senior Independent Director)

> at least one member of the Board being from

an ethnic minority background (2023: one).

Further information on the Board and Committee

Diversity Policy and developing a diverse pipeline

is set out in the Nominations Committee Report

on pages 100 to 102, and on the wider Company’s

approach to Inclusion and Diversity can be found

on pages 36 and 37.

The data required by Listing Rule 9.8.6 for the

Board of Directors and executive management as

at 30 September 2023 is set out on the following

page. The data is based on the existing

information held by the Company’s HR team and

individual confirmations made as part of the

Company’s year-end sign off processes.

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OTHER DISCLOSURES (CONTINUED)

Number of

Board members

Percentage of

the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number

in executive

management*

Percentage

in executive

management*

Men 6 60% 3 8 73%

Women 4 40% 1 3 27%

Not specified/prefer not to say – – – – –

Ethnicity

Number

of Board

members

Percentage of

the Board

Number of

senior positions

on the Board

(CEO, CFO, SID

and Chair)

Number

in executive

management*

Percentage

in executive

management*

White British or other White

(including minority-white groups) 9 90% 4 11 100%

Mixed/Multiple Ethnic Groups – – – – –

Asian/Asian British 1 10% – – –

Black/African/Caribbean/

Black British – – – – –

Other ethnic group,

including Arab – – – – –

Not specified/prefer not to say – – – – –

* For the purposes of the FCA disclosures, ‘executive management’ is required to refer to the AMB (the most senior

executive body below the Board) and the Company Secretary, as set out under Listing Rule 9.8.6R(10). However, the

Company Secretary is not a member of the AMB, therefore as set out earlier in this report, the AMB (Executive

Committee) (and their direct reports) currently comprises 30% female and 70% male colleagues. Further details of our

female and male representation are set out on page 38.

EMPLOYEES

Employees with a disability

As part of our commitment to inclusion and

diversity, we treat every applicant in our

recruitment process fairly, including those

requiring workplace adjustments. We also continue

to support employees who require workplace

adjustments to achieve their full potential,

including through training and development

needs. However, for our two largest communities,

pilots and cabin crew, we are bound by regulatory

requirements for ability with which all applicants

and employees must comply, for operational

safety reasons.

Communication and engagement

Details on how the Board and management have

communicated and engaged with employees and

the wider workforce while taking into account their

interests in decision making during the year can be

found in the Stakeholder engagement section on

pages 95 to 99.

Participation in share schemes

A key component of easyJet’s reward philosophy

is to provide share ownership opportunities

throughout the Group by making annual awards

of performance-related shares to all eligible

employees when certain criteria are met. In

addition, easyJet operates a voluntary discounted

share purchase arrangement for all employees via

a Save As You Earn scheme, and a Buy As You

Earn arrangement in the UK under the tax-

approved Share Incentive Plan. Further details of

the Company’s share schemes are disclosed within

the Directors’ Remuneration Report on pages 113

to 130.

STAKEHOLDERS

Details on the methods the Board has used to

engage and build strong business relationships

with the Group’s suppliers, customers and other

key stakeholders are given on pages 95 to 99.

Further information on how the Board considered

stakeholders in its decision making can be found

in the Corporate Governance Report on page 72

to 99. The section 172 statement is available on

page 69.

Share capital and rights attaching to shares

The Company’s issued share capital as at

30 September 2023 comprised a single class of

ordinary shares. Further details of the Company’s

share capital during the year are disclosed in note

21 to the consolidated financial statements.

All of the issued ordinary shares are fully paid

and rank equally in all respects. The rights and

obligations attaching to the Company’s ordinary

shares are set out in its Articles of Association.

Holders of ordinary shares are entitled, subject

to any applicable law and the Company’s Articles

of Association, to:

> have shareholder documents made available to

them, including notice of any general meeting;

> attend, speak and exercise voting rights at

general meetings, either in person or by proxy,

unless they are subject to disenfranchisement;

and

> participate in any distribution of income or

capital.

Directors’ powers in relation to issuing or

buying back shares

Subject to applicable law and the Company’s

Articles of Association the Directors may exercise

all powers of the Company, including the power

to authorise the issue and/or market purchase of

the Company’s shares (subject to an appropriate

authority being given to the Directors by

shareholders in a general meeting and any

conditions attaching to such authority).

At the AGM held on 9 February 2023, the Directors

were given the following authority:

> to allot shares up to a nominal amount of

£68,253,388 representing approximately

one-third of the Company’s then-issued share

capital;

> to allot shares comprising equity securities up

to a further aggregate nominal amount of

£68,253,388 in connection with an offer by way

of a rights issue, representing approximately

one-third of the Company’s then issued share

capital;

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Governance

> the powers given to the Directors by the

Company’s Articles of Association to implement

disenfranchisement and to limit the ownership

of the Company’s shares by non-UK nationals or,

following a decision of the Directors, by non-EU

nationals, and powers to enforce this limitation,

including the right to force a sale of any

affected shares.

There are no restrictions on exercising voting rights

save in situations where the Company is legally

entitled to impose such a restriction (for example

under the Articles of Association where an

Affected Share Notice has been served, amounts

remain unpaid in the shares after request, or the

holder is otherwise in default of an obligation to

the Company).

Those shareholders who own shares whose voting

rights will be suspended at the AGM will receive an

Affected Share Notice by post from Equiniti, our

registrars in January 2024 notifying them of the

suspension of voting rights in respect of their

Affected Shares. Shareholders in receipt of an

Affected Share Notice will not be entitled to

attend, speak or vote at the AGM, in respect of

those shares subject to an Affected Share Notice.

The Company is not aware of any other

arrangements between shareholders that may

result in restrictions on the transfer of securities

or voting rights.

Variation of rights

Subject to the Companies Act 2006, rights

attached to any class of shares may be varied

with the consent in writing of the holders of

three-quarters in nominal value of the issued

shares of the class or with the sanction of a

special resolution passed at a separate general

meeting of such class.

> to allot shares, without first offering them to

existing shareholders in proportion to their

holdings, up to a maximum nominal value of

£20,682,844, representing approximately 10% of

the Company’s then issued share capital;

> to allot shares, without first offering them to

existing shareholders in proportion to their

holdings, up to a maximum nominal value of

£20,682,844, representing approximately 10% of

the Company’s then issued share capital only in

connection with the financing (or refinancing, if

the authority is to be used within 12 months

after the original transaction) of an acquisition

or specified capital investment; and

> to purchase in the market a maximum of

75,801,002 shares representing approximately

10% of the Company’s then share capital.

No shares were allotted or bought back under the

above authorities during the year and up to the

date of this report.

Voting rights and restrictions on

transfer of shares

None of the ordinary shares carry any special

rights with regard to control of the Company.

There are no restrictions on transfers of shares

other than:

> certain restrictions which may from time to time

be imposed by laws or regulations such as those

relating to insider dealing;

> pursuant to the Company’s Share Dealing Code,

whereby the Directors and designated

employees require approval to deal in the

Company’s shares;

> where a person with an interest in the

Company’s shares has been served with a

disclosure notice and has failed to provide the

Company with information concerning interests

in those shares;

> where a proposed transferee of the Company’s

shares has failed to provide to the Directors a

declaration of nationality (together with such

evidence as the Directors may require) as

required by the Company’s Articles of

Association; and

Employee share schemes – rights of control

The trustees of the easyJet UK Share Incentive

Plan, which is used to acquire and hold shares in

the Company for participants in the UK Share

Incentive Plan, does not seek to exercise voting

rights on shares held other than on direction of

the underlying beneficiaries. The trustees take no

action in respect of ordinary shares for which they

have received no direction to vote, or in respect of

ordinary shares which are unallocated.

The trustee of the easyJet plc Employee Benefit

Trust (the Trust), which is used to acquire and hold

shares in the Company for the benefit of

employees, including in connection with the easyJet

Long Term Incentive Plan, the International Share

Incentive Plan and Save As You Earn plans, has the

power to vote or not vote, at its absolute discretion,

in respect of any shares in the Company held

unallocated in the Trust. However, in accordance

with good practice, the trustee adopts a policy of

not voting in respect of such shares. Both the

trustees of the easyJet UK Share Incentive Plan and

the easyJet plc Employee Benefit Trust have a

dividend waiver in place in respect of shares which

are the beneficial property of each of the trusts.

ADDITIONAL INFORMATION

Substantial interests

As at 30 September 2023, the Company had been

notified of the following disclosable interests in its

issued ordinary shares in accordance with DTR 5:

Number of

shares as

notified to the

Company

% of issued

share capital

as at

30 September

2023

The Haji-Ioannou family

concert party

shareholding, consisting

of easyGroup Holdings

Limited (holding vehicle

for Sir Stelios Haji-Ioannou

and Clelia Haji-Ioannou)

and Polys Haji-Ioannou

(through his holding

vehicle Polys Holdings

Limited) 115,737,821 15.27%

Societe Generale 33,384,779 4.40%

The Company was not notified of any changes

between 30 September 2023 and 28 November

2023.

Annual General Meeting

The Board currently intends to hold the AGM

on 8 February 2024. The arrangements for

the Company’s 2024 AGM and details of the

resolutions to be proposed, together with

explanatory notes, will be set out in the Notice of

AGM to be published on the Company’s website.

Articles of Association

The Company’s Articles of Association may only

be amended by a special resolution at a general

meeting of the shareholders, and were last

amended at the AGM on 23 December 2020. A

copy of the Articles is available on the Company’s

website: corporate.easyJet.com.

Branches

The Group, through various subsidiaries, has

established branches in France, Germany, Italy, the

Netherlands, Portugal and Spain, in which the

business operates.

Financial instruments

Details of the Group’s use of financial instruments,

together with information on our financial risk

management objectives and policies, hedging

policies and our exposure to financial risks, can be

found in notes 25 and 26 of the consolidated

financial statements.

Going concern and viability statement

The Company’s going concern and viability

statements are detailed on pages 67 and 68

of the strategic report.

OTHER DISCLOSURES (CONTINUED)

The Annual Report and Accounts have been

drawn up and presented in accordance with

UK company law and the liabilities of the

Directors in connection with the report shall

be subject to the limitations and restrictions

provided by such law.

easyJet plc is incorporated as a public limited

company and is registered in England under

number 3959649. easyJet plc’s registered

office is Hangar 89, London Luton Airport,

Luton, Bedfordshire LU2 9PF.

The strategic report (comprising pages 2 to

70) and Directors’ Report (comprising pages

72 to 112 and 131 to 134) were approved by the

Board and signed on its behalf by the

Company Secretary.

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> June 2019: Eurobonds consisting of €500 million

guaranteed Notes paying 0.875% coupon and

maturing in June 2025; and

> March 2021: Eurobonds consisting of €1.2 billion

guaranteed Notes paying 1.875% interest and

maturing in March 2028.

Pursuant to the final terms attaching to the Notes,

the Company will be required to make an offer to

redeem or purchase the Notes at their principal

amount plus interest up to the date of redemption

or repurchase if there is a change of control of the

Company which results in a downgrade of the

credit rating of the Notes to a non-investment

grade rating or withdrawal of the rating by both

Moody’s and Standard & Poor’s.

Revolving Credit Facility

On 9 September 2021, easyJet entered into a

revolving credit facility (the RCF). The RCF

amounts to a $400 million commitment,

supported by a syndicate of banks, and has a

termination date of September 2025 (unless

extended). If there is a change of control of the

Company, the lenders are not required to lend

easyJet any money under the RCF. Lenders may

also request that any amounts that have been

borrowed (together with accrued interest and all

other amounts accrued or outstanding under the

RCF) become immediately due and payable.

UK Export Finance Facilities Agreement

On 16 June 2023, easyJet entered into a five-year

sustainability-linked term loan facility of $1.75 billion

underwritten by a syndicate of banks and

supported by a partial guarantee from UK Export

Finance under their Export Development

Guarantee scheme (the EDG Facility). If there is a

change of control of the Company, the lenders are

not required to lend easyJet any money under the

EDG Facility. Lenders may also request that any

amounts that have been borrowed (together with

accrued interest and all other amounts accrued or

outstanding under the EDG Facility) become

immediately due and payable. The EDG Facility is

undrawn and replaced easyJet’s previous export

development guarantee facility of $1.87 billion

entered into in January 2021.

Independent auditors

A resolution to reappoint PricewaterhouseCoopers

LLP as auditors of the Group will be put to

shareholders at the forthcoming AGM.

Political donations and expenditure

easyJet works constructively with all levels of

government across its network, regardless of

political affiliation. easyJet believes in the rights of

individuals to engage in the democratic process;

however, it is easyJet’s policy not to make political

donations. There were no political donations made

or political expenditure incurred during the 2023

financial year.

Greenhouse gas emissions and

energy consumption

Details of the Company’s greenhouse gas

emissions (GHG), energy consumption, energy

efficiency action and Streamlined Energy and

Carbon Reporting (SECR) disclosures can be

found on page 45 of the strategic report.

SIGNIFICANT AGREEMENTS – CHANGE OF CONTROL

The Company licenses the easyJet brand from

easyGroup Limited. Further details are set out in

note 29 to the financial statements.

The following significant agreements, which were

in force at 28 November 2023, take effect, alter or

terminate on a change of control of the Company.

EMTN Programme and Eurobond Issue

On 7 January 2016, the Group established a Euro

Medium Term Note Programme (the EMTN

Programme) which provides the Group with a

standardised documentation platform to allow for

senior unsecured debt issuance in the Eurobond

markets. The maximum potential issuance under

the EMTN Programme is £4 billion.

Under the EMTN Programme, the following notes

(the Notes) have been issued by the Company

and easyJet Finco B.V.:

> February 2016: Eurobonds consisting of €500

million guaranteed Notes paying 1.75% coupon.

This was repaid on its maturity date in February

2023;

> October 2016: Eurobonds consisting of €500

million guaranteed Notes paying 1.125% coupon.

This was repaid on its maturity date in October

2023;

Other agreements

The Company does not have agreements with

any Director or employee that would provide

compensation for loss of office or employment

resulting from a change of control on takeover,

except that provisions of the Company’s share

schemes and plans may cause options and awards

granted to employees under such schemes and

plans to vest on a takeover.

By order of the Board

Ben Matthews

Company Secretary

Luton

28 November 2023

Disclosures required under Listing Rule 9.8.4

The information to be included in the 2023 Annual

Report and Accounts under LR 9.8.4, where

applicable, can be located as set out below.

Information Page

Shareholder waiver of future

dividends 134

Other information that is relevant to this report,

and which is incorporated by reference, can be

located as follows:

Information Page

Directors’ service contracts 127

Environmental, Social and

Governance (ESG) matters

20–21

and 39–58

Corporate governance report 71–130

Activities in relation to research

and development 18-19, 43–53

Events after statement of financial

position date 188

OTHER DISCLOSURES (CONTINUED)

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STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENTS

The directors are also responsible for keeping

adequate accounting records that are sufficient

to show and explain the Group’s and Company’s

transactions and disclose with reasonable

accuracy at any time the financial position of the

Group and Company and enable them to ensure

that the financial statements and the Directors’

Remuneration Report comply with the Companies

Act 2006.

The directors are responsible for the maintenance

and integrity of the Company’s website. Legislation

in the United Kingdom governing the preparation

and dissemination of financial statements may

differ from legislation in other jurisdictions.

DIRECTORS’ CONFIRMATIONS

Each of the Directors, whose names and functions

are listed on pages 89 to 91, confirm that, to the

best of their knowledge:

> the Group financial statements, which have

been prepared in accordance with UK-adopted

international accounting standards, give a true

and fair view of the assets, liabilities, financial

position and profit of the Group;

> the Company financial statements, which have

been prepared in accordance with United

Kingdom Accounting Standards, comprising

FRS 101, give a true and fair view of the assets,

liabilities and financial position of the Company;

and

> the Strategic Report, included in the Annual

Report, includes a fair review of the

development and performance of the business

and the position of the Group and Company,

together with a description of the principal risks

and uncertainties that it faces.

The Directors are responsible for preparing the

Annual Report and Accounts 2023 and the

financial statements in accordance with applicable

law and regulation.

Company law requires the Directors to prepare

financial statements for each financial year. Under

that law the Directors have prepared the Group

financial statements in accordance with UK-

adopted international accounting standards and

the Company financial statements in accordance

with United Kingdom Generally Accepted

Accounting Practice (United Kingdom Accounting

Standards, comprising FRS 101 ‘Reduced Disclosure

Framework’, and applicable law).

Under company law, directors must not approve

the financial statements unless they are satisfied

that they give a true and fair view of the state of

affairs of the Group and Company and of the

profit or loss of the Group for that period. In

preparing the financial statements, the directors

are required to:

> select suitable accounting policies and then

apply them consistently;

> state whether applicable UK-adopted

international accounting standards have been

followed for the Group financial statements and

United Kingdom Accounting Standards,

comprising FRS 101 have been followed for the

Company financial statements, subject to any

material departures disclosed and explained in

the financial statements;

> make judgements and accounting estimates

that are reasonable and prudent; and

> prepare the financial statements on the going

concern basis unless it is inappropriate to

presume that the Group and Company will

continue in business.

The directors are responsible for safeguarding the

assets of the Group and Company and hence for

taking reasonable steps for the prevention and

detection of fraud and other irregularities.

In the case of each Director in office at the date

the Directors’ Report is approved:

> so far as the Director is aware, there is no

relevant audit information of which the Group’s

and Company’s auditors are unaware; and

> they have taken all the steps that they ought

to have taken as a Director in order to make

themselves aware of any relevant audit

information and to establish that the Group’s

and Company’s auditors are aware of that

information.

This responsibility statement was approved by the

Board of Directors on 28 November 2023 and

signed on its behalf by:

Johan Lundgren

Chief Executive

Kenton Jarvis

Chief Financial Officer

Governance

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OPINION

In our opinion:

> easyJet Plc’s group financial statements and company financial

statements (the “financial statements”) give a true and fair view of

the state of the group’s and of the company’s affairs as at

30 September 2023 and of the group’s profit and the group’s cash

flows for the year then ended;

> the group financial statements have been properly prepared in

accordance with UK-adopted international accounting standards

as applied in accordance with the provisions of the Companies Act

2006;

> the company financial statements have been properly prepared in

accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards, including FRS 101

“Reduced Disclosure Framework”, and applicable law); and

> the financial statements have been prepared in accordance with

the requirements of the Companies Act 2006.

We have audited the financial statements, included within the Annual

Report and Accounts 2023 (the “Annual Report”), which comprise:

Consolidated and Company statements of financial position as at

30 September 2023; Consolidated income statement and

Consolidated statement of comprehensive income, Consolidated and

company statements of changes in equity, and the Consolidated

statement of cashflows for the year then ended; and the notes to

the financial statements, which include a description of the

significant accounting policies.

Our opinion is consistent with our reporting to the Audit Committee.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards

on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities

under ISAs (UK) are further described in the Auditors’ responsibilities

for the audit of the financial statements section of our report. We

believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our opinion.

Independence

We remained independent of the group in accordance with the

ethical requirements that are relevant to our audit of the financial

statements in the UK, which includes the FRC’s Ethical Standard, as

applicable to listed public interest entities, and we have fulfilled our

other ethical responsibilities in accordance with these requirements.

To the best of our knowledge and belief, we declare that non-audit

services prohibited by the FRC’s Ethical Standard were not provided.

Other than those disclosed in Note 3 to the financial statements and

the Audit Committee Report, we have provided no non-audit

services to the company or its controlled undertakings in the period

under audit.

OUR AUDIT APPROACH

Context

There were no significant changes to the Group’s operations during

the year. Following the easing of the previous travel restrictions,

more normalised levels of trading and passenger volumes have

returned in the current year. easyJet holidays also grew significantly

during the year, with its second full summer of largely unrestricted

trading, and contributed over 25% of the total Group profit in the

current year. There are a number of changes to our key audit matters

this year as explained later in the report.

Overview

Audit scope

> We performed full scope audit procedures over the Company and

two individually significant components in the Group. Procedures

over material financial statement lines were performed in relation

to four further components.

> Separate audit procedures were performed in relation to

consolidation adjustments and balances which arise or eliminate

on consolidation of the Group financial statements, including

goodwill and postemployment benefit obligations.

> This provided coverage of over 95% of both external consolidated

revenue and consolidated profit before tax.

Key audit matters

> Assessment of impairment of easyJet plc’s investment in, and

recoverability of intercompany receivables due from, easyJet

Airline Company Limited (parent)

> Valuation of the leased aircraft maintenance provision (group)

Materiality

> Overall group materiality: £30,000,000 (2022: £21,500,000)

based on an average of 5% of headline profit/loss before tax over

the last 5 years on an absolute basis.

> Overall company materiality: £46,000,000 (2022: £19,350,000)

based on 1% of total assets, capped at 90% of Group materiality

for the purposes of the Group audit.

> Performance materiality: £22,500,000 (2022: £16,125,000) (group)

and £34,500,000 (2022: £14,500,000) (company).

The scope of our audit

As part of designing our audit, we determined materiality and

assessed the risks of material misstatement in the financial

statements.

Key audit matters

Key audit matters are those matters that, in the auditors’ professional

judgement, were of most significance in the audit of the financial

statements of the current period and include the most significant

assessed risks of material misstatement (whether or not due to

fraud) identified by the auditors, including those which had the

greatest effect on: the overall audit strategy; the allocation of

resources in the audit; and directing the efforts of the engagement

team. These matters, and any comments we make on the results of

our procedures thereon, were addressed in the context of our audit

of the financial statements as a whole, and in forming our opinion

thereon, and we do not provide a separate opinion on these matters.

This is not a complete list of all risks identified by our audit.

Assessment of impairment of goodwill and other intangible assets

(group) and Recoverability of deferred tax assets (group), which were

key audit matters last year, are no longer included because of the

improvements in current and forecast trading performance which

have led to increased levels of headroom being observed in the

goodwill and other intangibles impairment assessment, and a

reduction to the risk that deferred tax assets may not be

recoverable. Otherwise, the key audit matters below are consistent

with last year.

REPORT ON THE AUDIT OF

THE FINANCIAL STATEMENTS

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Independent auditors’ report to the members of easyJet Plc (CONTINUED)

Key audit matter How our audit addressed the key audit matter

Assessment of impairment of easyJet plc’s investment in, and recoverability of intercompany

receivables due from, easyJet Airline Company Limited (parent)

At 30 September 2023, easyJet plc holds

an investment of £1.0bn (2022: £1.0bn) and

intercompany receivables of £3.6bn (2022:

£3.4bn), with easyJet Airline Company

Limited (EACL), resulting in a total

investment (total investment) balance of

£4.6bn (2022: £4.4nbn). The directors have

considered the cash flow projections for

the Airline cash-generating unit (“CGU”),

which are considered to be the relevant

cash flows for the purposes of assessing

impairment of the total investment in EACL.

We focused on the risk of impairment as

the impairment test involves estimates to

be made by management, many of which

are forward-looking. These estimates

include key assumptions underpinning the

strategic plan, fuel prices including

exchange rates (including the ability of cost

increases to be passed through to the

customer), contracted increases in fleet

size, revenue per seat short and long-term

economic growth rates and the impacts of

climate change on future cash flows. In

addition we noted a potentially heightened

risk in the current year due to the market

capitalisation falling below the current

aggregate carrying value of these assets.

Refer to the Accounting policies,

judgements and estimates note (note 1),

Note 10 to the consolidated financial

statements and Notes a), c) and f) to the

Company financial statements, for

management’s disclosures of the relevant

judgements and estimates involved in

assessing the total investment balance for

impairment.

We obtained management’s annual impairment assessment and ensured

the calculations were mathematically accurate and that the methodology

used was in line with the requirements of IAS 36 ‘Impairment of Assets’.

> We concluded that using the Airline CGU cash flows is appropriate for

the purposes of performing the assessment of impairment of the total

investment held in EACL.

> We evaluated the future cash flow forecasts of the CGU, and the

process by which the forecasts were drawn up. In doing this, we

confirmed that the forecasts used for the impairment assessment were

appropriately consistent with the latest available Board plans (excluding

the impact of easyJet holidays which is a separate CGU).

> We evaluated the inputs in the Value In Use (VIU) calculation and

challenged the key assumptions including assessment of short and

medium-term flying assumptions by comparing them to industry

forecasts;

> using our internal valuation experts to calculate an independent

WACC rate range, with reference to comparable businesses, to

assess the appropriateness of the WACC rate used in management’s

assessment;

> assessment of the fuel price assumptions, to ensure the rates used

at 30 September 2023 were appropriate and that sufficient

disclosure of the underlying assumptions for dealing with future

potential fuel and Emissions Trading Scheme credit price volatility via

pass through to customers have been adequately disclosed in the

financial statements; and

> we evaluated the extent to which the considerations of climate

change, such as costs associated with emissions trading schemes

and the expected increased use of sustainable aviation fuels, had

been reflected in the underlying cash flows and management’s

sensitivities. This included an assessment of the consistency of the

assumptions used with the latest impact assessments that have

been carried out by easyJet’s sustainability team, including the

continuing fleet transition.

> We assessed the implied enterprise value based on current market

capitalisation and compared this to the underlying asset carrying

values. We have also understood management’s explanation for the

difference between the current implied enterprise value and the cash

flows derived on a VIU basis.

> We reviewed the adequacy of disclosures made in the financial

statements and assessed compliance with disclosure requirements,

including challenging management to be transparent about the

underlying risk scenarios which have been assessed and embedded into

its future cash flow assumptions.

Based on our work summarised above, we have concluded that the

investment in and amounts due from, easyJet Airline Company Limited are

not impaired at 30 September 2023 and that appropriate assumption and

sensitivity disclosures have been made in the financial statements.

Key audit matter How our audit addressed the key audit matter

Valuation of the leased aircraft maintenance provision (group)

The Group operates aircraft which are held

under lease arrangements and for which it

incurs liabilities for maintenance costs

during the term of the lease. These arise

from legal and contractual obligations

relating to the condition of the aircraft

when they are returned to the lessor.

Significantly material maintenance

provisions for aircraft maintenance costs in

respect of leased aircraft were recorded in

the financial statements at 30 September

2023. At each statement of financial

position date, the calculation of the

maintenance provision includes a number

of variable factors and assumptions

including primarily the expected cost of the

heavy maintenance check and the time it is

expected to occur.

We focused on this area because of the

inherent level of management estimation

required in calculating the amount of

provision needed as a result of the

subjective estimation of uncontracted

variable costs and related inflationary

increases which may arise as part of the

overall cost estimate.

Refer to the Accounting policies,

judgements and estimates note (note 1)

and Note 19, for management’s disclosures

of the relevant judgements and estimates

involved in assessing this provision

valuation.

> We evaluated the maintenance provision model and tested the

calculations therein.

> We evaluated the judgements made by management to calculate

certain elements of the provision based on the expectation of incurring

penalties rather than performing maintenance restoration work before

the lease end date. We also performed testing to agree these penalty

rates back to the contractual agreements.

> We assessed the process by which the variable elements within the

provision are estimated, evaluating the reasonableness of the assumptions,

testing the input data and re-performing calculations. Our testing has

focussed on those elements of the cost assumptions which are most

exposed to estimation uncertainty, being the non-fixed elements of the

current estimate of event costs and the future inflation/escalation of these

costs to the date at which the event is expected to arise.

> We challenged the key assumptions using both the Group’s internal

data, such as maintenance contract terms and pricing, historical

experience, business plans and forecasts as well as external data points

such as external contracts, and price indices. We also performed

sensitivity analysis in respect of the key cost and inflationary

assumptions identified above, which are the elements most exposed to

estimation uncertainty. We found no material exceptions from these

assessments and comparisons.

> We have assessed the methodology by which the gross provision has

been discounted back to present value and considered it to be

appropriate.

> Having ascertained the magnitude of movements in those key

assumptions that would be required for the provision to be misstated,

we considered the likelihood of such movements arising and any impact

on the overall level of aircraft maintenance provisions recorded in the

financial statements. Our assessment as to likelihood and magnitude of

misstatement did not identify any material exceptions.

> We reviewed the adequacy of disclosures made in the financial

statements and challenged management to be clear on what the

critical sources of estimation uncertainty are with respect to this

balance and to ensure that the sensitivity disclosures provided are

relevant to those specific areas.

Based on the work performed, as summarised above, we have concluded

the Group’s valuation of maintenance provisions on leased aircraft and

disclosure of the related critical estimates is materially appropriate.

Governance

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How we tailored the audit scope

We tailored the scope of our audit to ensure that we performed

enough work to be able to give an opinion on the financial

statements as a whole, taking into account the structure of the

group and the company, the accounting processes and controls,

and the industry in which they operate.

The Group operates through the Company and its fourteen

subsidiary undertakings of which eight were actively trading through

the year. The remaining subsidiaries are either holding companies or

currently dormant. The accounting for these subsidiaries, each of

which is considered to be a separate component in the way we

scope our audit, is primarily centralised in the UK.

We determined the most effective approach to scoping was to

perform full scope audit procedures over the Company and two

individually significant components in the Group which are registered

in the UK. Procedures over material financial statements lines were

performed in respect of four further components. In some cases,

financial statement line items are tested in aggregate to the Group

materiality where they arise on consolidation. All Group audit work

has been performed by the UK Group engagement team.

Additional audit procedures were performed in relation to

consolidation adjustments by the UK Group engagement team. The

testing approach ensured that appropriate audit evidence was

obtained over all financial statement line items in order to support

our opinion on the Group financial statements as a whole.

The impact of climate risk on our audit

Climate change risk is expected to have a significant impact on the

aviation industry. As explained in the Sustainability Report, the Group

is clearly mindful of their impact on the environment and in

September 2022 set out their roadmap to net zero carbon emissions

by 2050, including an interim target to have reduced well-to wake

GHG emissions by 35% by 2035, aligned with the Science-Based

Targets initiative and how they aim to deliver on these targets.

In planning and executing our audit we have considered the Group’s

risk assessment process and the steps the business expects to take

to deliver on its GHG emissions target. This, together with

discussions with management and our own sustainability specialists

and reading the Group’s most recent sustainability reporting,

including their latest Carbon Disclosure Project submission, provided

us with a good understanding of the potential impact of climate

change on the financial statements.

We assessed that the key financial statement line items and

estimates which are more likely to be materially impacted by climate

risks are those associated with future cash flows, given the more

notable impacts of climate change on the business are expected to

arise in the medium to long term. These include the key audit matter

in respect of the assessment of impairment of easyJet plc’s

investment in, and recoverability of intercompany receivables due

from, easyJet Airline Company Limited, as well as the assessment of

impairment of goodwill and other intangible assets and the

recoverability of the Group’s deferred tax assets. We have

considered the estimated costs used by management in relation to

carbon credits required to be purchased under Emission trading

schemes and the minimum levels of SAF usage required under

currently implemented mandates. We have also specifically

considered how easyJet’s net zero targets impact on likely aircraft

ownership periods, residual value changes for less fuel-efficient

aircraft, and the related impact on ongoing depreciation charges in

respect of aircraft assets held at 30 September 2023. In addition we

also considered the consistency of the disclosures in relation to

climate change (including the disclosures in the Task Force on

Climate-related Financial Disclosures (TCFD) section) within the

Annual Report and Accounts with the financial statements and our

knowledge obtained from our audit.

Whilst the Group has started to quantify some of the impacts that

may arise on its pathway towards its net zero targets, the future

financial impacts are clearly uncertain given the medium to long

term time horizon and the technological advancements that will be

necessary, including further updates to sustainable aviation fuel

mandates and the development of zero emissions aircraft. We have

discussed with management and the Audit Committee that the

estimated financial impacts of climate change, which are expected

to be significant, will need to be frequently reassessed and our

expectation that climate change disclosures will continue to evolve

as greater understanding of the actual and potential impacts on the

Group’s future operations is obtained.

Materiality

The scope of our audit was influenced by our application of

materiality. We set certain quantitative thresholds for materiality.

These, together with qualitative considerations, helped us to

determine the scope of our audit and the nature, timing and extent of

our audit procedures on the individual financial statement line items

and disclosures and in evaluating the effect of misstatements, both

individually and in aggregate on the financial statements as a whole.

Based on our professional judgement, we determined materiality for

the financial statements as a whole as follows:

Financial statements – group Financial statements – company

Overall materiality

£30,000,000 (2022: £21,500,000). £46,000,000 (2022: £19,350,000).

How we determined it

Based on an average of 5% of headline profit/loss

before tax over the last 5 years on an absolute

basis

Based on 1% of total assets, capped at 90% of

Group materiality for the purposes of the Group

audit

Rationale for benchmark

applied

We consider that the income statement remains

the principal measure used by the shareholders in

assessing the underlying performance of the

Group and therefore an approach to materiality

based on 5% of the headline profit/loss before tax

has been applied. However, given the continued

recovery in the current year and volatility in trading

caused by the impact of Covid, we have used an

average of the headline profit/loss before tax over

the last 5 years on an absolute basis.

We believe that a total asset benchmark is

appropriate given that the Company does not

generate revenues of its own.

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For each component in the scope of our group audit, we allocated a

materiality that is less than our overall group materiality. The range of

materiality allocated across components was between £5,214,442

and £27,000,000. Certain components were audited to a local

statutory audit materiality that was also less than our overall group

materiality.

We use performance materiality to reduce to an appropriately low

level the probability that the aggregate of uncorrected and

undetected misstatements exceeds overall materiality. Specifically,

we use performance materiality in determining the scope of our

audit and the nature and extent of our testing of account balances,

classes of transactions and disclosures, for example in determining

sample sizes. Our performance materiality was 75% (2022: 75%) of

overall materiality, amounting to £22,500,000 (2022: £16,125,000)

for the group financial statements and £34,500,000 (2022:

£14,500,000) for the company financial statements.

In determining the performance materiality, we considered a number

of factors - the history of misstatements, risk assessment and

aggregation risk and the effectiveness of controls - and concluded

that an amount at the upper end of our normal range was

appropriate.

We agreed with the Audit Committee that we would report to them

misstatements identified during our audit above £1,500,000 (group

audit) (2022: £1,075,000) and £1,500,000 (company audit) (2022:

£1,075,000) as well as misstatements below those amounts that, in

our view, warranted reporting for qualitative reasons.

CONCLUSIONS RELATING TO GOING CONCERN

Our evaluation of the directors’ assessment of the group’s and the

company’s ability to continue to adopt the going concern basis of

accounting included:

> Review of management’s base case and severe but plausible

downside scenario, ensuring the directors have considered

appropriate factors. This included consideration of the cash flows

against current industry forecasts, the liquidity position of the

Group, available financing facilities, the timing of contractual debt

repayments and committed capital expenditure and the relevant

liquidity requirements that exist as part of the contractual

arrangements with current card acquirers.

Based on the work we have performed, we have not identified any

material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the group’s

and the company’s ability to continue as a going concern for a

period of at least twelve months from when the financial statements

are authorised for issue.

Strategic report and Directors’ Report

In our opinion, based on the work undertaken in the course of the

audit, the information given in the Strategic report and Directors’

Report for the year ended 30 September 2023 is consistent with the

financial statements and has been prepared in accordance with

applicable legal requirements.

In light of the knowledge and understanding of the group and

company and their environment obtained in the course of the audit,

we did not identify any material misstatements in the Strategic

report and Directors’ Report.

Directors’ Remuneration

In our opinion, the part of the Directors’ Remuneration Report to be

audited has been properly prepared in accordance with the

Companies Act 2006.

CORPORATE GOVERNANCE STATEMENT

The Listing Rules require us to review the directors’ statements in

relation to going concern, longer-term viability and that part of the

corporate governance statement relating to the company’s

compliance with the provisions of the UK Corporate Governance Code

specified for our review. Our additional responsibilities with respect to

the corporate governance statement as other information are

described in the Reporting on other information section of this report.

Based on the work undertaken as part of our audit, we have

concluded that each of the following elements of the corporate

governance statement, included within the Governance and

Strategic Report sections of the Annual Report is materially

consistent with the financial statements and our knowledge obtained

during the audit, and we have nothing material to add or draw

attention to in relation to:

> The directors’ confirmation that they have carried out a robust

assessment of the emerging and principal risks;

> The disclosures in the Annual Report that describe those principal

risks, what procedures are in place to identify emerging risks and

an explanation of how these are being managed or mitigated;

> The directors’ statement in the financial statements about whether

they considered it appropriate to adopt the going concern basis of

accounting in preparing them, and their identification of any

material uncertainties to the group’s and company’s ability to

continue to do so over a period of at least twelve months from the

date of approval of the financial statements;

> The directors’ explanation as to their assessment of the group’s

and company’s prospects, the period this assessment covers and

why the period is appropriate; and

> The directors’ statement as to whether they have a reasonable

expectation that the company will be able to continue in operation

and meet its liabilities as they fall due over the period of its

assessment, including any related disclosures drawing attention to

any necessary qualifications or assumptions.

In auditing the financial statements, we have concluded that the

directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate.

However, because not all future events or conditions can be

predicted, this conclusion is not a guarantee as to the group’s and

the company’s ability to continue as a going concern.

In relation to the directors’ reporting on how they have applied the

UK Corporate Governance Code, we have nothing material to add or

draw attention to in relation to the directors’ statement in the

financial statements about whether the directors considered it

appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with

respect to going concern are described in the relevant sections of

this report.

REPORTING ON OTHER INFORMATION

The other information comprises all of the information in the Annual

Report other than the financial statements and our auditors’ report

thereon. The directors are responsible for the other information. Our

opinion on the financial statements does not cover the other

information and, accordingly, we do not express an audit opinion or,

except to the extent otherwise explicitly stated in this report, any

form of assurance thereon.

In connection with our audit of the financial statements, our

responsibility is to read the other information and, in doing so,

consider whether the other information is materially inconsistent with

the financial statements or our knowledge obtained in the audit, or

otherwise appears to be materially misstated. If we identify an

apparent material inconsistency or material misstatement, we are

required to perform procedures to conclude whether there is a

material misstatement of the financial statements or a material

misstatement of the other information. If, based on the work we

have performed, we conclude that there is a material misstatement

of this other information, we are required to report that fact. We

have nothing to report based on these responsibilities.

With respect to the Strategic report and Directors’ Report, we also

considered whether the disclosures required by the UK Companies

Act 2006 have been included.

Based on our work undertaken in the course of the audit, the

Companies Act 2006 requires us also to report certain opinions and

matters as described below.

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Our review of the directors’ statement regarding the longer-term

viability of the group and company was substantially less in scope

than an audit and only consisted of making inquiries and considering

the directors’ process supporting their statement; checking that the

statement is in alignment with the relevant provisions of the UK

Corporate Governance Code; and considering whether the

statement is consistent with the financial statements and our

knowledge and understanding of the group and company and their

environment obtained in the course of the audit.

In addition, based on the work undertaken as part of our audit, we

have concluded that each of the following elements of the corporate

governance statement is materially consistent with the financial

statements and our knowledge obtained during the audit:

> The directors’ statement that they consider the Annual Report,

taken as a whole, is fair, balanced and understandable, and

provides the information necessary for the members to assess

the group’s and company’s position, performance, business model

and strategy;

> The section of the Annual Report that describes the review of

effectiveness of risk management and internal control systems;

and

> The section of the Annual Report describing the work of the Audit

Committee.

We have nothing to report in respect of our responsibility to report

when the directors’ statement relating to the company’s compliance

with the Code does not properly disclose a departure from a relevant

provision of the Code specified under the Listing Rules for review by

the auditors.

RESPONSIBILITIES FOR THE FINANCIAL STATEMENTS AND THE AUDIT

Responsibilities of the directors for the financial statements

As explained more fully in the Statement of Directors’ responsibilities

in respect of the financial statements, the directors are responsible

for the preparation of the financial statements in accordance with

the applicable framework and for being satisfied that they give a

true and fair view. The directors are also responsible for such internal

control as they determine is necessary to enable the preparation of

financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the directors are responsible

for assessing the group’s and the company’s ability to continue as a

going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless the

directors either intend to liquidate the group or the company or to

cease operations, or have no realistic alternative but to do so.

Auditors’ responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether

the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an

auditors’ report that includes our opinion. Reasonable assurance is a

high level of assurance, but is not a guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a material

misstatement when it exists. Misstatements can arise from fraud or

error and are considered material if, individually or in the aggregate,

they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with

laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect material misstatements in

respect of irregularities, including fraud. The extent to which our

procedures are capable of detecting irregularities, including fraud, is

detailed below.

Based on our understanding of the group and industry, we identified

that the principal risks of non-compliance with laws and regulations

related to regulatory compliance to ensure Air Operator’s Certificates

(held in the UK, Switzerland and Austria) and travel provider licences

remain valid and fully operational, the majority of voting rights being

held by EU persons, Task Force on Climate-Related Financial

Disclosures, Streamlined Energy and Carbon Reporting (SECR)

requirements, consumer protection legislation, adherence to data

protection requirements in the jurisdictions in which easyJet operates

and holds data, regulatory compliance requirements to and non-

compliance with employment regulations in the UK and other

jurisdictions in which the Group operates, and we considered the

extent to which non-compliance might have a material effect on the

financial statements. We also considered those laws and regulations

that have a direct impact on the financial statements such as

compliance with the requirements of emissions trading schemes and

customer claims regulation, The Listing Rules, UK and overseas tax

legislation, The UK Corporate Governance Code 2018 and Companies

Act 2006. We evaluated management’s incentives and opportunities

for fraudulent manipulation of the financial statements (including the

risk of override of controls), and determined that the principal risks

were related to inappropriate journal entries in the underlying books

and records and management bias in accounting estimates. Audit

procedures performed by the engagement team included:

> Discussions with management, internal audit and the Group’s legal

team, including consideration of known or suspected instances of

non-compliance with laws and regulations and fraud

> Challenging assumptions and judgements made by management

in it’s significant accounting estimates that involved making

assumptions and considering future events that are inherently

uncertain. We focused on the valuation of the maintenance

provision, and for the Company the assessment of impairment of

the investment in and intercompany receivables due from easyJet

Airline Company Limited (see related key audit matters above). We

also specifically assessed the provisions held in respect of actual

and potential litigation matters, provisions held for customer

compensation, breakage on contract liabilities held with

customers, the assessment of impairment of intangible assets, and

the recoverability of deferred tax assets

> Consideration of recent correspondence with the Group’s legal

advisors to ensure that it aligned with the conclusions drawn on

obligations recognised and contingent liabilities disclosed in

respect of uncertain legal matters

> Identifying and testing journal entries, in particular certain journal

entries posted with unusual account combinations

> Designing audit procedures to incorporate unpredictability around

the nature, timing or extent of our testing

There are inherent limitations in the audit procedures described

above. We are less likely to become aware of instances of non-

compliance with laws and regulations that are not closely related to

events and transactions reflected in the financial statements. Also,

the risk of not detecting a material misstatement due to fraud is

higher than the risk of not detecting one resulting from error, as

fraud may involve deliberate concealment by, for example, forgery or

intentional misrepresentations, or through collusion.

Our audit testing might include testing complete populations of

certain transactions and balances, possibly using data auditing

techniques. However, it typically involves selecting a limited number

of items for testing, rather than testing complete populations. We will

often seek to target particular items for testing based on their size or

risk characteristics. In other cases, we will use audit sampling to

enable us to draw a conclusion about the population from which the

sample is selected.

A further description of our responsibilities for the audit of the

financial statements is located on the FRC’s website at: www.frc.org.

uk/auditorsresponsibilities. This description forms part of our

auditors’ report.

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Use of this report

This report, including the opinions, has been prepared for and only

for the company’s members as a body in accordance with Chapter 3

of Part 16 of the Companies Act 2006 and for no other purpose. We

do not, in giving these opinions, accept or assume responsibility for

any other purpose or to any other person to whom this report is

shown or into whose hands it may come save where expressly

agreed by our prior consent in writing.

OTHER REQUIRED REPORTING

COMPANIES ACT 2006 EXCEPTION REPORTING

Under the Companies Act 2006 we are required to report to you if,

in our opinion:

> we have not obtained all the information and explanations we

require for our audit; or

> adequate accounting records have not been kept by the company,

or returns adequate for our audit have not been received from

branches not visited by us; or

> certain disclosures of directors’ remuneration specified by law are

not made; or

> the company financial statements and the part of the Directors’

Remuneration Report to be audited are not in agreement with the

accounting records and returns.

We have no exceptions to report arising from this responsibility.

APPOINTMENT

Following the recommendation of the Audit Committee, we were

appointed by the members on 22 February 2006 to audit the

financial statements for the year ended 30 September 2006 and

subsequent financial periods. The period of total uninterrupted

engagement is 18 years, covering the years ended 30 September

2006 to 30 September 2023.

OTHER MATTER

In due course, as required by the Financial Conduct Authority

Disclosure Guidance and Transparency Rule 4.1.14R, these financial

statements will form part of the ESEF-prepared annual financial

report filed on the National Storage Mechanism of the Financial

Conduct Authority in accordance with the ESEF Regulatory Technical

Standard (‘ESEF RTS’). This auditors’ report provides no assurance

over whether the annual financial report will be prepared using the

single electronic format specified in the ESEF RTS.

Matthew Mullins (Senior Statutory Auditor)

for and on behalf of PricewaterhouseCoopers LLP

Chartered Accountants and Statutory Auditors

Watford

28 November 2023

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CONSOLIDATED INCOME STATEMENT

Notes

Year ended 30 September

2023 2022

Headline

£ million

Non-headline

(note 5)

£ million

Total

£ million

Headline

£ million

Non-headline

(note 5)

£ million

Total

£ million

Passenger revenue 5 ,221 – 5, 221 3,81 6 – 3, 81 6

Ancillary revenue

Airline ancillary revenue 2 , 1 74 – 2 , 1 74 1,5 85 – 1, 585

Holidays incremental revenue 7 76 – 7 76 36 8 – 368

Total ancillary revenue 2,950 – 2,950 1,953 – 1,953

Total revenue 8 8 ,1 7 1 – 8 ,1 7 1 5 ,769 – 5 ,76 9

Fuel (2 ,03 3) – (2 ,03 3) (1 , 2 7 9) – (1 , 2 7 9)

Airports and ground handling

(1,800) – (1,800) (1,4 4 3) – (1 ,4 4 3)

Crew (941) – (941) (767) – (767)

Navigation (4 2 2) – (4 2 2) (3 3 9) – (3 3 9)

Maintenance (341) – (3 41) (3 01) – (301)

Holidays direct operating costs (excluding flights)

(5 82) – (5 82) (2 7 3) – (2 7 3)

Selling and marketing (2 32) – (2 32) (1 7 3) – (17 3)

Other costs (6 95) (1 0) (70 5) (6 3 5) (3 0) (6 6 5)

Other income 5 6 11 10 – 10

EBITDAR 1, 130 (4) 1,1 2 6 5 69 (3 0) 539

Aircraft dry leasing – – – (2) – (2)

Depreciation 11 (62 5) (1 9) (6 4 4) (5 3 9) – (5 3 9)

Amortisation of intangible assets 10 (2 9) – (2 9) (2 5) – (25)

Operating profit/(loss) 476 (23) 453 3 (3 0) (2 7)

Interest receivable and other financing income 132 – 132 26 – 26

Interest payable and other financing charges (1 8 0) – (1 8 0) (1 43) – (143)

Foreign exchange gain/(loss) 27 – 27 (6 4) – (6 4)

Net finance charges 2 (2 1) – (21) (18 1) – (1 8 1)

Profit/(loss) before tax 3 455 (23) 4 32 (1 7 8) (3 0) (2 0 8)

Tax (charge)/credit 6 (11 4) 6 (1 08) 31 8 39

Profit/(loss) for the year 3 41 (17) 3 24 (147) (2 2) (1 6 9)

Earnings/(loss) per share, pence

Basic 7 4 3 .1 (2 2 . 4)

Diluted 7 42.7 (2 2 . 4)

1) Revenue and expenditure of easyJet holidays recognised in the prior year has been re-presented, see note 1a for details.

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Notes

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Profit/(loss) for the year 324 (1 6 9)

Other comprehensive (loss)/income

Items that may be reclassified to the income statement:

Cash flow hedges

Fair value (losses)/gains in the year (1 9) 7 74

Gains transferred to income statement (51) (7 3 0)

Hedge ineffectiveness/discontinuation loss/(gain) transferred to income statement 1 (5)

Related deferred tax credit/(charge) 6 12 (11)

Cost of hedging (9) 8

Related deferred tax credit/(charge) 6 2 (2)

Items that will not be reclassified to the income statement:

Remeasurement (loss)/gain of post-employment benefit obligations 20 (8) 41

Related deferred tax charge 6 (1) (1 0)

Fair value gains on equity investment – 1

(73) 66

Total comprehensive income/(loss) for the year 251 (103)

Fair valuation losses in the year are primarily due to movements in the foreign exchange rates partially offset by gains on fuel hedges.

(Gains)/losses on cash flow hedges reclassified from other comprehensive income to the income statement by income statement caption are as follows:

2023

£ million

2022

£ million

Revenue 6 (9)

Fuel (86) (663)

Maintenance (5) (7)

Eurobonds (within foreign exchange gain/(loss)) 21 (30)

Other financing income 13 (21)

(51) (730)

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes

As at

30 September

2023

£ million

As at

30 September

2022

re-presented

£ million

Non-current assets

Goodwill 10 365 3 65

Other intangible assets 10 276 217

Property, plant and equipment 11 4,86 4 4, 62 9

Derivative financial instruments 25 35 127

Equity investment 25 31 31

Restricted cash 14 2 3

Other non-current assets 12 138 91

Deferred tax assets 6 – 62

5,7 11 5 , 525

Current assets

Trade and other receivables 13 343 367

Intangible assets 10 676 495

Derivative financial instruments 25 186 423

Restricted cash 14 – 4

Money market deposits 14 – 126

Cash and cash equivalents 14 2 ,92 5 3,514

4, 130 4,92 9

Current liabilities

Trade and other payables

15 (1 ,7 6 4) (1 ,7 5 9)

Unearned revenue 16 (1, 49 8) (1 , 0 42)

Borrowings 17 (4 3 3) (4 3 7)

Lease liabilities 18 (2 17) (2 4 7)

Derivative financial instruments 25 (5 4) (8 6)

Current tax payable 6 (3) (5)

Provisions for liabilities and charges

19 (1 75) (1 0 2)

(4 ,1 4 4) (3,678)

Net current (liabilities)/assets (1 4) 1 , 251

Notes

As at

30 September

2023

£ million

As at

30 September

2022

re-presented

£ million

Non-current liabilities

Borrowings 17 (1,4 62) (2 , 7 6 0)

Unearned revenue 16 (3) (1)

Lease liabilities 18 (7 72) (8 6 6)

Derivative financial instruments 25 (14) (2 2)

Non-current deferred income (4) (4)

Post-employment benefit obligation 20 (7) (1)

Provisions for liabilities and charges 19 (62 6) (5 8 9)

Deferred tax liabilities 6 (2 2) –

(2 , 91 0) (4 , 2 4 3)

Net assets 2 ,78 7 2,5 33

Shareholders’ equity

Share capital 21 207 207

Share premium 2 ,1 6 6 2,1 6 6

Hedging reserve 113 1 70

Cost of hedging reserve (2) 5

Translation reserve 72 (6)

Retained earnings/(accumulated losses) 231 (9)

Total equity 2,7 87 2,5 3 3

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

The financial statements on pages 142 to 188 were approved by the Board of Directors and authorised

for issue on 28 November 2023 and signed on behalf of the Board.

Johan Lundgren Kenton Jarvis

Director Director

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

capital

£ million

premium

£ million

Hedging

reserve

£ million

Cost of hedging

reserve

£ million

Translation

reserve

£ million

Retained

earnings/

(accumulated

losses)

£ million

Total

equity

£ million

At 1 October 2022 207 2 ,1 6 6 170 5 (6) (9) 2,533

Profit for the year – – – – – 3 24 3 24

Other comprehensive loss – – (5 7) (7) – (9) (73)

Total comprehensive income/(loss) – – (57) (7) – 315 251

Share incentive schemes

Employee share schemes –

value of employee services (note 22) – – – – – 18 18

Purchase of own shares – – – – – (15) (1 5)

Currency translation transfer

– – – – 78 (78) –

At 30 September 2023 207 2 ,1 6 6 113 (2) 72 23 1 2,787

capital

£ million

premium

£ million

Hedging

reserve

£ million

Cost of hedging

reserve

£ million

Translation

reserve

£ million

Retained

earnings/

(accumulated

losses)

£ million

Total

equity

£ million

At 1 October 2021 207 2,1 6 6 156 (1) – 111 2, 63 9

Loss for the year – – – – – (1 6 9) (1 6 9)

Other comprehensive income – – 28 6 – 32 66

Total comprehensive (loss)/income – – 28 6 – (13 7) (1 03)

Transfers to property, plant and equipment – – (1 4) – – – (1 4)

Share incentive schemes

Employee share schemes –

value of employee services (note 22) – – – – – 26 26

Purchase of own shares – – – – – (9) (9)

Currency translation differences – – – – (6) – (6)

At 30 September 2022 2 07 2,1 6 6 1 70 5 (6) (9) 2, 5 3 3

1) The translation reserves transfer relates to a correction of a historical error in the retranslation of monetary assets and liabilities in overseas subsidiaries on consolidation. The cumulative

amount of exchange differences on these balances were previously presented within retained earnings/(accumulated losses) in the consolidated statement of changes in equity and the

consolidated statement of financial position. However, these exchange differences should have been presented as part of the translation reserve. This has resulted in a £78 million transfer

between retained earnings/(accumulated losses) and the translation reserve to more accurately present the cumulative foreign exchange gains recognised on consolidation. The nature of

the error is considered to not constitute a material error on a qualitative basis and therefore the impact has been adjusted in the current year. There is no change in brought forward or

carried forward total equity from this change and no restatement of the consolidated statement of financial position or consolidated statement of changes in equity has been made.

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments relating to highly probable

transactions that are forecast to occur after the year end.

At 30 September 2023, amounts in the cost of hedging reserve comprised of a £3 million gain related to cross-currency basis (2022: £7 million gain) and a

£5 million loss related to the time value of options (2022: £2 million loss).

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CONSOLIDATED STATEMENT OF CASH FLOWS

Notes

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Cash flows from operating activities

Cash generated from operations 23 1,509 8 92

Interest and other financing charges paid 2 (162) (1 3 0)

Interest and other financing income received 2 125 11

Settlement of derivatives 91 7

Net tax paid 6 (12) (4)

Net cash generated from operating activities 1, 551 7 76

Cash flows from investing activities

Purchase of property, plant and equipment 11 (67 7) (5 0 1)

Purchase of non-current other intangible assets 10 (77) (2 9)

Net decrease/(increase) in money market deposits 24 126 (1 2 6)

Net proceeds from sale and leaseback of aircraft 76 87

Net cash used in investing activities (55 2) (5 6 9)

Cash flows from financing activities

Proceeds from issue of ordinary share capital – 91

Share issue transaction costs – (3 8)

Purchase of own shares for employee share schemes (15) (9)

Repayment of bank loans and other borrowings 24 (1 ,1 9 2) (37 7)

Repayment of capital element of leases 24 (21 8) (2 0 6)

Decrease in restricted cash 14 5 7

Net cash used in financing activities (1 , 42 0) (5 3 2)

Effect of exchange rate changes (168) 3 03

Net decrease in cash and cash equivalents (5 8 9) (2 2)

Cash and cash equivalents at beginning of year 3, 514 3,536

Cash and cash equivalents at end of year 14 2 ,92 5 3,514

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NOTES TO THE FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES, JUDGEMENTS AND ESTIMATES

Statement of compliance

easyJet plc (the ‘Company’) and its subsidiaries (‘easyJet’ or the ‘Group’ as applicable) is a low-cost airline

carrier operating principally in Europe. The Company is a public limited company (company number

03959649), incorporated and domiciled in the United Kingdom, whose shares are listed on the London

Stock Exchange under the ticker symbol EZJ. The address of its registered office is Hangar 89, London

Luton Airport, Luton, Bedfordshire, LU2 9PF, England.

The consolidated financial statements of easyJet plc have been prepared in accordance with UK-

adopted International Accounting Standards and with the requirements of the Companies Act 2006

as applicable to companies reporting under those standards.

Basis of preparation

The financial statements are prepared based on the historical cost convention except for certain

financial assets and liabilities, including derivative financial instruments, financial guarantees, equity

investments, and certain contingent liabilities and commitments, which are measured at fair value.

easyJet’s business activities, together with factors likely to affect its future development and

performance, are described in the strategic report on pages 2 to 70. Principal risks and uncertainties are

described on pages 61 to 66. Note 26 to the financial statements sets out the Group’s objectives, policies

and procedures for managing its capital and gives details of the risks related to financial instruments

held by the Group.

The financial statements have been prepared on a going concern basis. In adopting the going concern

basis for preparing these financial statements, the Directors have considered easyJet’s business

activities, together with factors likely to affect its future development and performance, as well as

easyJet’s principal risks and uncertainties through to June 2025.

As at 30 September 2023, easyJet had a net cash position of £41 million including cash and cash

equivalents of £2.9 billion, with unrestricted access to £4.7 billion of liquidity, and has retained ownership

of 54% of the total fleet, all of which are unencumbered.

The Directors have reviewed the financial forecasts and funding requirements with consideration given

to the potential impact of severe but plausible risks. easyJet has modelled a base case representing

management’s best estimation of how the business plans to perform over the period. The future impact

of climate change on the business has been incorporated into strategic plans, including the estimated

financial impact within the base case cash flow projections of the future estimated price of Emissions

Trading System (ETS) allowances, the phasing out of the free ETS allowances from 2024, and the

expected price and quantity required of Sustainable Aviation Fuel (SAF) usage and fleet renewals.

The business is exposed to fluctuations in fuel prices and foreign exchange rates. easyJet is currently

c.76% hedged for fuel in H1 of FY24 at c.$867 per metric tonne, c.51% hedged for H2 FY24

at c.$823 and c.25% hedged for H1 FY25 at c.$832.

In modelling the impact of severe but plausible downside risks, the Directors have considered demand

suppression leading to a reduction in ticket yield of 5% and a reduction in Holidays contribution of 5%.

The model also includes the reoccurrence of additional disruption costs (at FY22 levels), an additional

$50 per metric tonne on the fuel price, 1.5% additional operating cost inflation and an adverse

movement on the US dollar rate. These impacts have been modelled across the whole going concern

period. In addition, this downside model also includes a grounding of 25% of the fleet for the duration of

the peak trading month of August, to cover the range of severe but plausible risks that could result in

significant operational disruption. This downside scenario resulted in a significant reduction in liquidity

but still maintained sufficient headroom on external liquidity requirements.

The Directors also considered a separate downside model that included the operational disruption and

adverse US dollar rate but, instead of the yield reduction, modelled increased costs (additional 3%

inflation assumed on operating costs) and an additional $100 per metric tonne on the fuel price

compared to the base case. This scenario was not as severe and as such still resulted in sufficient

headroom. It was not deemed plausible to combine yield reduction and the higher cost and fuel

increases based on an analysis of historical information across the airline industry.

After reviewing the current liquidity position, committed funding facilities, the base case and severe but

plausible downside financial forecasts incorporating the uncertainties described above, the Directors

have a reasonable expectation that the Group has sufficient resources to continue in operation for the

foreseeable future. For these reasons, the Directors continue to adopt the going concern basis of

accounting in preparing the Group’s financial statements.

The use of critical accounting estimates and management judgement is required in applying relevant

accounting policies to the Group’s consolidated financial statements. Areas involving a higher degree of

judgement, or where assumptions and estimates are significant to the financial statements and carry

estimation risk, are highlighted on pages 156 and 157.

Climate change

In preparing the financial statements, the Directors have considered the impact of climate change,

particularly in the context of the climate change risks identified in the Sustainability section of the

strategic report, the Group’s stated target of net zero carbon emissions by 2050, and our commitment

to reducing our carbon emissions intensity by 35% by 2035. These targets and risks have been

considered in relation to the financial reporting judgements and estimates in the current year and these

have not materially impacted the conclusions reached including;

> the estimates of future cash flows used in impairment assessments of the carrying value of

non-current assets;

> the estimates of future profitability used in our assessment of the recoverability of deferred tax

assets in the UK; and

> the useful economic lives (UELs) and related residual values for our less fuel-efficient aircraft.

Known climate-related impacts are incorporated into the Group’s short term and medium term cashflows

including the fleet planning, the purchase of next-generation aircraft, fuel-saving initiatives and costs

associated with carbon, i.e., updated mandates for the phase out of ETS allowances by 2026 and the

expected price and quantity required of SAF usage.

Climate change is not expected to have any significant impact on demand or further impact on the

Group’s short term cash flows considered in the going concern and viability assessments. Additional

identified climate based risks and the impact of these in the absence of actions taken by easyJet to

manage the transition are considered in the stress testing for impairment and viability. In particular the

impact of a reduction in demand due to investor/market sentiment and increased costs due to changes

in technology, regulatory and legal requirements have been considered.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies applied in the preparation of the consolidated financial statements

are summarised below. Unless otherwise stated they have been applied consistently to both years

presented. The explanations of these policies focus on areas where judgement is applied or which are

particularly significant in the financial statements.

Basis of consolidation

The consolidated financial statements incorporate those of easyJet plc and its subsidiaries for the years

ended 30 September 2022 and 2023. A full list of subsidiaries can be found in the Notes to the

Company financial statements on page 191.

A subsidiary is an entity controlled by easyJet plc. Control is achieved when easyJet is exposed to, or has

rights to, variable returns from its involvement with the investee and has the ability to affect those

returns through its power, directly or indirectly, over the investee.

Intragroup balances, transactions, and any unrealised gains and losses arising from intragroup

transactions are eliminated in preparing the consolidated financial statements.

Foreign currencies

The primary economic environment in which a subsidiary operates determines its functional currency.

The consolidated financial statements of easyJet are presented in sterling, rounded to the nearest

£ million, which is the Company’s functional currency and the Group’s presentation currency.

Transactions arising in foreign currencies are recorded using the rate of exchange ruling at the date of

the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the

functional currency using the rate of exchange ruling at the end of a reporting period and (except where

the asset or liability is designated as a cash flow hedge) the gains or losses on translation are included in

the income statement. Non-monetary assets and liabilities denominated in foreign currencies are

translated into the functional currency at foreign exchange rates ruling at the dates the transactions

were effected.

Certain subsidiaries have operations that are primarily influenced by a currency other than sterling.

Exchange differences arising on the translation of these foreign operations are taken to the translation

reserve within shareholders’ equity until all or part of the interest is disposed of, when the relevant

portion of the accumulated exchange gains or losses is recognised in the income statement. Profits and

losses of foreign operations are translated into sterling at average monthly rates of exchange during the

year, as this approximates the rates on the dates of the transactions.

Change in presentation

Presentation of easyJet holidays

The presentation of the consolidated income statement has been amended in order to provide more

relevant information to the users of the financial statements, reflecting the increasing significance of the

Holidays operating segment. Holidays revenues have historically been presented within ‘Ancillary

revenue’, whilst associated costs have been presented within the ‘Airports, ground handling, holidays

accommodation, and other operating costs’ line. Ancillary revenue has now been split into ancillary

revenue attributable to airline passengers and Holidays incremental revenue, which is the revenue from

holidays’ customers net of flight revenue; the passenger revenue and airline ancillary revenue attributable

to holidays’ customers being included in the passenger revenue and airlines ancillary revenue lines

respectively. Additionally, a new cost line ‘Holidays direct operating costs’ is shown which includes costs

specific to the Holidays business such as accommodation costs and airport transfers.

The prior year has been presented on a consistent basis, which has resulted in the re-presentation of the

consolidated income statement as below.

Year ended 30 September 2022

(Previously reported) (Re-presented)

Headline

£ million

Non-

headline

(note 5)

£ million

Total

£ million

Headline

£ million

Non-

headline

(note 5)

£ million

Total

£ million

Revenue

Passenger revenue 3,816 – 3,816 3,816 – 3,816

Airline ancillary – – – 1,585 – 1,585

Holidays incremental revenue – – – 368 – 368

Ancillary revenue 1,953 – 1,953 1,953 – 1,953

Tota l revenue 5,769 – 5,769 5,769 – 5,769

Expenditure

Airports and ground handling – – – (1,443) – (1,443)

Airports, ground handling, holidays

accommodation, and other

operating costs (1,716) – (1,716) – – –

Holidays direct operating costs

(excluding flights) – – – (273) – (273)

Tota l (1,716) – (1,716) (1,716) – (1,716)

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

Presentation of the liability for compensation for airline customer delays and cancellations

In previous reporting periods easyJet has classified the liability for compensation and reimbursements

for airline customers arising from flight delays and cancellations as a provision. In response to a ruling by

the International Financial Reporting Interpretations Committee (IFRIC) that compensation for delays

gives rise to variable consideration, this liability has been re-presented from provisions for liabilities and

charges to liabilities within trade and other payables. This impacts both the statement of financial

position and the accompanying notes to the financial statements. The prior year statement of financial

position has been re-presented as described below, the impact on accompanying notes is described in

those notes. Specifically, for note 19, as a result of this re-presentation, the provision for holidays’

customer compensation for quality issues, personal injury and illness, and the provision for refunds of air

passenger duty and similar charges have been re-presented as ‘Other provisions’.

As at 30 September 2022

Previously

reported

£ million

Re-presented

£ million

Current liabilities

Trade and other payables (1,685) (1,759)

Provisions for liabilities and charges (176) (102)

Remaining other current liabilities (1,817) (1,817)

(3,678) (3,678)

The value of the liability for the year ending 30 September 2021 was not material and therefore the 1

October 2021 opening balance in the relevant comparative notes has not been re-presented.

Impairment of non-financial assets

easyJet has identified two separate cash-generating units (CGUs) which are two separate groups of

assets generating largely independent cash flows, these being easyJet’s airline route network and its

Holidays business.

All goodwill, landing rights, current intangible assets, associated working capital balances, aircraft and

aircraft spares belong to the Airline CGU which is tested annually for impairment or when there is an

indication of impairment. A single value in use (VIU) calculation is performed in order to assess the

recoverability of the assets.

The Holidays CGU includes other intangible assets, which are subject to amortisation and working capital

associated to the Holidays segment. The CGU is tested for impairment annually or when there is an

indication of impairment.

A further description of the calculation of the VIU and current year outcome and sensitivities for the

Airline CGU is given in note 10.

Goodwill and other intangible assets

Goodwill arising on acquisition has been recognised as an asset and initially measured at cost, being the

excess of the cost of the business combination over easyJet’s interest in the net fair value of the

identifiable assets acquired and the liabilities assumed. Goodwill is stated at cost less any accumulated

impairment losses. It has an indefinite expected useful life and is tested for impairment as part of the

Airline CGU on an annual basis or when there is an indication of impairment.

Landing rights are stated at cost less any accumulated impairment losses. They are considered to have

an indefinite useful life as they remain available for use for the foreseeable future provided minimum

utilisation requirements are observed. Landing rights form part of the Airline CGU and are therefore

tested for impairment at least annually or when there is an indication of impairment. Landing rights with

a carrying value that have no further VIU and have been surrendered for nil value are de-recognised and

a loss on disposal recognised in the income statement at the point of surrender.

When assessing for impairment or reassessing UELs, easyJet considers potential significant future

changes including in relation to market, technological, economic and legal developments. The potential

future impacts of climate change have been incorporated by including the estimated financial impact

within cash flow projections of the future estimated price of ETS allowances, and the expected price and

quantity required of SAF usage. Additional risks associated with climate change have also been stress

tested, including sensitivities of SAF usage and ETS costs, additional legal and technology costs,

reduced demand and increased cost of maintenance and replacement aircraft.

Computer software is stated at cost and is amortised from the point at which the asset is ready for use

on a straight-line basis over the asset’s UEL. UELs are reviewed annually.

Expected useful life

Computer software 3–7 years

Annual licence agreements to use Cloud software are expensed and treated as a service agreement.

Perpetual licences to use Cloud software are capitalised if easyJet has both a contractual right to the

software and the ability to run the software independently of the host vendor, but are otherwise expensed.

Customisation and configuration costs related to the implementation of Cloud-based applications are

expensed unless the activity creates an asset that is separate and identifiable from the software.

EU ETS, CH ETS and UK ETS carbon allowances

easyJet participates in the EU ETS, CH (Swiss) ETS and UK ETS schemes. Participants are required to

purchase and surrender ETS carbon allowances to cover their annual carbon emissions from flying.

The surrender process takes place ahead of the compliance deadline of 30 April each year in respect

of the preceding calendar year. A proportion of allowances are issued for free and are recognised at fair

value, being the market value on the date they are received, with a corresponding liability recognised

simultaneously. Purchased allowances are recognised at the purchase price. Both free and purchased

carbon allowances are held as current intangible assets and are not subsequently revalued as they are

held for own use.

As part of the annual surrender process free allowances will be surrendered first with purchased

allowances then surrendered on a first in, first out (FIFO) basis. The income statement expense (included

in fuel costs), recognised throughout the year as the liability is incurred through flying, is based on a

weighted average cost of the free and purchased allowances estimated to be surrendered (on the FIFO

basis described above) as part of the annual surrender process. A corresponding liability of the same

value is also recognised. As such, for any financial year, three months of the related expense will be

known having already been surrendered, with nine months of the expense subject to a degree of

estimation. Where insufficient allowances are held in easyJet’s registry at the financial year end, when

compared with the expected calendar year surrender, the remainder of the income statement expense

is estimated using the market price of allowances as at the financial year end date. Both the related

asset and liability are extinguished only at the point when the allowances are surrendered.

These current intangible assets form part of the Airline CGU and are reviewed for impairment annually

or when there is an indication of impairment within the Airline CGU.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

Carbon offsetting and Verified Emission Reductions

Up until 31 December 2022, easyJet operated a voluntary policy to offset every tonne of carbon and

carbon equivalents emitted from fuel used for all its flights. This was done through purchasing Verified

Emission Reduction (VERs) certificates arising from Gold Standard or Verified Carbon Standard (VCS)

accredited projects. The Voluntary Offsetting Policy was retired in September 2022 but VER assets

remain on the consolidated statement of financial position to offset the estimated emissions from flights

booked up to and including 31 December 2022 and with a departure date after 30 September 2023.

The value of these assets is immaterial, and they will be retired in financial year 2024. No contractual

commitments remain for the purchase of VERs.

easyJet continues to hold on the consolidated statement of financial position a number of VERs that

were purchased under contractual obligations and are surplus to the certificates required to meet the

remaining obligation for flights booked up to 31 December 2022. These certificates are being actively

marketed for sale, but are held on the consolidated statement of financial position at purchase price.

The value is not material. When sold, any excess of sale value over the purchase price value held on the

consolidated statement of financial position will be recognised in other income.

Additionally, easyJet has an obligation under French law to offset CO

emissions incurred for French

domestic flights. No carbon certificates have yet been purchased for the obligation; the liability for the

certificates required to be purchased is not material and is recognised on the consolidated statement of

financial position under trade and other payables.

Property, plant and equipment

Property, plant and equipment (PPE) is stated at cost less accumulated depreciation. Depreciation is

calculated to write off the cost, less estimated residual value, of assets on a straight-line basis over

their UELs. UELs and residual values are reviewed annually.

Expected useful life

Aircraft

18–23 years

2, 3

Aircraft spares 18 years

Aircraft – prepaid maintenance 7–10 years

Leasehold improvements 5–10 years or the length of lease if shorter

Freehold land Not depreciated

Fixtures, fittings and equipment

3 years or length of lease of property where equipment is used if shorter

Computer hardware

3–5 years

1) Aircraft held as right of use assets are depreciated over the lease term; see leases section. Contractual capital

maintenance associated with leased aircraft is charged as depreciation to the income statement as the usage that

defines the maintenance event occurs.

2) easyJet operate a fleet of Airbus ceo and neo aircraft. The newer neo aircraft have a UEL of 23 years. Aligning to the

longer-term plan for ceo aircraft, and the ambition to replace these over time with the more fuel efficient neo aircraft

as part of easyJet’s net zero commitment, ceo aircraft have a shorter UEL of 18 years.

3) Aircraft are depreciated once in the location and condition necessary to be capable of operating in the manner

intended by management.

4) Other assets within note 11.

Residual values are reviewed annually, at the end of the reporting period, against prevailing market rates

for assets of an equivalent age, and the depreciation applied is adjusted accordingly on a prospective

basis. The carrying value of PPE assets is part of the Airline CGU and is therefore reviewed for

impairment at least annually or when there is any indication of impairment within the CGU. For aircraft,

easyJet is dependent on Airbus as its sole supplier. This gives rise to an increased valuation risk, which

crystallises when aircraft exit the fleet, where easyJet is reliant on the future demand for second-hand

aircraft and specifically Airbus aircraft. Future developments, such as the impact of climate change on

the market, technological, economic or legal environment, are considered when assessing residual values

and UELs.

An element of the cost of a new aircraft is attributed on acquisition to prepaid maintenance, reflecting

the ‘full-life’ maintenance status of key components of the aircraft at the point of transition of ownership.

This cost is depreciated over a period of between seven to ten years from the date of manufacture, in

accordance with the maintenance schedule for the aircraft. Subsequent costs incurred which lend

enhancement to future periods, such as long-term scheduled maintenance and major overhaul of

aircraft and engines, are capitalised at the time of the event and depreciated over the length of the

period benefiting from these enhancements. All other maintenance costs for owned aircraft are charged

to the income statement as incurred.

Pre-delivery payments made in respect of aircraft are recorded in PPE at cost. These amounts are not

depreciated. A proportion of easyJet’s financing costs have been attributed to pre-delivery payments,

made in respect of aircraft and other qualifying assets under construction. These are capitalised and

added to the cost of the asset concerned. Pre-delivery payments are depreciated from the point at

which the aircraft to which they relate is received and ready for commercial use.

Gains and losses on disposals (other than aircraft-related sale and leaseback transactions) are

determined by comparing the net proceeds with the carrying amount of the asset and are recognised

in the income statement.

Freehold land is recorded at cost and not depreciated as it is considered to have an indefinite useful life.

Leases

When a contractual arrangement contains a lease, easyJet recognises a lease liability and a

corresponding right of use asset at the commencement of the lease.

At the commencement date the lease liability is measured at the present value of the future lease

payments, discounted using the Group’s incremental borrowing rate where the interest rate in the lease is

not readily determined. Lease payments include fixed payments and variable payments which are

dependent on an index or rate. Where an index or rate is used this is initially measured using the index or

rate at commencement. Subsequently, the lease liability is adjusted by increasing the carrying amount to

reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made,

and remeasuring the carrying amount to reflect any reassessment or lease modifications.

The lease term is determined from the commencement date of the lease and the duration of the

non-cancellable term. If easyJet has an extension option, which it considers it is reasonably certain to

exercise, then the lease term will be considered to extend beyond that non-cancellable period to the end

of the extension period available. Where easyJet has previously assessed that there is no intention to

exercise an extension option but subsequently opts to exercise the option, then a modification would be

carried out. If easyJet has a termination option, which it considers it is reasonably certain to exercise,

then the lease term will be accounted for until the point when the termination option will take effect.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

At the commencement date the right of use asset is measured at an amount equal to the lease liability

plus any lease payments made before the commencement date and any initial direct costs, less any

lease incentive payments. An estimate of costs to be incurred in restoring an asset before return to the

lessor, in accordance with the terms of the lease, is also included in the right of use asset at initial

recognition. Subsequently, for leased aircraft, the right of use asset attracts maintenance work in

accordance with the contractual obligations of the lease, and a provision for the maintenance work is

built up as the aircraft is flown, with the offset being against the right of use asset. The maintenance

asset created is immediately fully depreciated as the liability is incurred as the aircraft is flown.

Adjustment is also made to the right of use asset to reflect any remeasurement of the corresponding

lease liability. The right of use assets form part of the Airline CGU and are therefore subject to review

for impairment annually or when there is an indication of impairment within the Airline CGU.

Short-term leases less than 12 months in length and low-value leases are not recognised as lease liabilities

and right of use assets but are recognised as an expense on a straight-line basis over the lease term.

In the consolidated statement of cash flows, payments for the interest element of recognised lease

liabilities are included in interest and other financing charges paid within cash flows from operating

activities. Payments for the principal element of recognised lease liabilities are presented within cash

flows from financing activities.

easyJet periodically enters into sale and leaseback transactions whereby it sells either new or mid-life

aircraft or engines to a third-party and immediately leases them back. Where the transaction is judged

to reflect the aircraft’s fair value, any gain or loss arising on disposal is recognised in the income

statement, to the extent that it relates to the rights that have been transferred. Gains and losses that

relate to the rights that have been retained are included in the carrying amount of the right of use asset

recognised at commencement of the lease. If sale proceeds received were determined to not be at the

aircraft’s fair value, any below market terms would be recognised as a prepayment of lease payments,

and above market terms recognised as additional financing provided by the lessor. Gains on sale and

leaseback transactions are recognised in other income, with losses on sale and leaseback transactions

recognised in other costs. Proceeds received for the sale of the fair value of the asset are recognised in

the statement of cash flows within investing activities as it relates to property, plant and equipment.

Other non-current assets

Other non-current assets include both general lease deposits, as stipulated in lease agreements, as well

as mid-life aircraft delivery assets for maintenance obligations incurred on mid-life aircraft before easyJet

acquired the aircraft. The payments and receivables are recorded within current and non-current assets

as applicable, pending reimbursement or receipt in accordance with contract specific terms.

Management assess the recoverability of these assets on an annual basis through consideration of the

credit position of the debtors and other relevant inputs. Under the general approach to assess

impairment of financial assets, easyJet recognises a loss allowance equal to the 12 month expected

credit losses.

Financial guarantees

Financial guarantees are initially measured at fair value and subsequently at the higher of the initial fair

value or the amount of the loss allowance determined by an expected credit loss calculation.

A loss allowance is calculated where easyJet is jointly and severally liable for financial guarantee

contracts. This is calculated based on the probability-weighted estimate of cash shortfalls to reimburse

the holder for a credit loss that it incurs and based on the agreements which may exist between any

co-guarantors.

Tax

Tax expense in the income statement consists of current and deferred tax. Tax is recognised in the

income statement except when it relates to items credited or charged directly to other comprehensive

income or shareholders’ equity, in which case it is recognised in other comprehensive income or

shareholders’ equity. The charge for current tax is based on the results for the year as adjusted for

income that is exempt and expenses that are not deductible, using tax rates that are applicable to the

taxable income.

Deferred tax is provided in full on temporary differences relating to the carrying amount of assets and

liabilities, where it is probable that the recovery or settlement will result in an obligation to pay more,

or a right to pay less, tax in the future, with the following exceptions:

> where the temporary difference arises from goodwill or from the initial recognition (other than in a

business combination) of other assets and liabilities in a transaction that affects neither taxable

income nor accounting profit; and

> deferred tax arising on investments in subsidiaries is not recognised where easyJet is able to control

the reversal of the temporary difference and it is probable that the temporary difference will not

reverse in the foreseeable future.

Deferred tax is calculated at the tax rates that are expected to apply in the periods in which recovery of

assets and settlement of liabilities are expected to take place, based on tax rates or laws enacted or

substantively enacted at the date of the statement of financial position.

Deferred tax assets represent amounts considered recoverable in future periods in respect of deductible

temporary differences, losses and tax credits carried forward. Deferred tax assets are recognised to the

extent that these are estimated to be fully recoverable against the unwind of taxable temporary

differences and future taxable income.

Deferred tax liabilities represent the amount of income taxes payable in future periods in respect of

taxable temporary differences.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax

assets against current tax liabilities and it is the intention to settle these on a net basis.

Provisions

Provisions are recognised when a present legal or constructive obligation arises as a result of a past

event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can

be made of the amount of the obligation. Amounts provided for represent the best estimate of the

consideration required to settle the present obligation at the statement of financial position date, taking

into account all related risks and uncertainties.

Restructuring

Provisions for restructuring arise principally in relation to network optimisation and head office reviews.

Provisions for restructuring programmes are made when easyJet has a demonstrable commitment to a

restructuring programme, for example through an announcement made to the impacted employees.

Restructuring provisions are measured based on the expected outcome of consultations with impacted

employees. Where specific individuals at risk have not been identified, estimations are based on

information available such as average payroll data, employee age and length of service.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

Maintenance

easyJet incurs liabilities for maintenance and restoration costs in respect of leased aircraft during the

term of the lease. These arise from legal and constructive contractual obligations relating to the

condition of the aircraft when it is returned to the lessor or when heavy maintenance events are

expected to occur during the period of the lease. Contractual maintenance obligations arising from the

ongoing use of the aircraft are provided for over the term of the lease based on the estimated future

costs of the maintenance events, or forecast penalty charges, discounted to present value. The provision

is built as the aircraft are flown, and recognised against the right of use asset, where it is immediately

fully depreciated as the flying hours that determine the provision have taken place. The restoration cost

obligation is described in the lease section.

Other

Other provisions include amounts in respect of onerous contracts, compensation for quality issues and

personal injury and illness for Holidays’ customers, the provision for refunds of air passenger duty and

similar charges, and potential liabilities for employee related matters and litigation which arise in the

normal course of business. Onerous contracts are recognised at the first indication that a loss is

anticipated, and the provision based on the expected economic outflow arising from the contracts.

Employee benefits

easyJet contributes to defined contribution pension schemes for the benefit of employees. The assets of

the schemes are held separately from those of easyJet in independently administered funds. easyJet’s

contributions are charged to the income statement in the year in which they are incurred. easyJet has

no further payment obligations once the contributions have been paid for defined contribution schemes.

See below for the treatment of the defined benefit Swiss pension scheme.

The expected cost of compensated annual leave and other employee benefits is recognised at the time

that the related employees’ services are provided.

Switzerland pension scheme

easyJet contributes to an independently administered post-employment fund for employees in

Switzerland. The benefit is contribution-based with certain minimum guarantees required by Swiss law

to the mandatory part of the benefit. Due to these minimum guarantees, the Swiss pension plan meets

IAS 19 Employee Benefits requirements to be treated as a defined benefit plan for the purposes of

these consolidated financial statements.

The easyJet portion of the current service cost and the net interest cost are charged to the consolidated

income statement in the year in which they relate. Actuarial gains and losses are recognised in the

consolidated statement of comprehensive income and the consolidated statement of financial position

reflects the net surplus or deficit at the reporting date.

The actuarial assumptions used to calculate the defined benefit obligation are based on the

requirements set out in IAS 19. They are set by management, based on advice from an independent

actuary. The defined benefit obligation is calculated using the projected unit credit method. The costs

of managing the plan assets are deducted as incurred in determining the return on plan assets and the

present value of projected future general administration expenses that are a direct consequence of

past service are included as part of the retirement benefit obligation.

Share capital and dividend distribution

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new

ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any Group company or employee benefit trust purchases the Company’s equity shares, the

consideration paid, and any directly attributable incremental costs are deducted from retained earnings until

the shares are cancelled or reissued. Proceeds from re-issue are shown as a credit to retained earnings.

easyJet settles share awards under the Long Term Incentive Plan, the Save As You Earn scheme,

Restricted Share Plan, Share Incentive Plans and Deferred Annual Bonus by purchasing its own shares on

the market through employee benefit trusts. The cost of such purchases are deducted from retained

earnings in the period that the transaction occurs.

Final dividend distributions to the Company’s shareholders are recognised as a liability in the period in

which the dividends are approved by the Company’s shareholders. Interim dividends are recognised

when paid.

Share-based payments

easyJet has a number of equity-settled share incentive schemes. The fair value of share options granted

under the Save As You Earn scheme is measured at the date of grant using the Binomial Lattice option

pricing model. The fair value of grants under the Long Term Incentive Plan is measured at the date of

grant using the Black–Scholes model for awards based on Return on Capital Employed (ROCE)

performance targets, and the Stochastic model (also known as the Monte Carlo model) for awards

based on Total Shareholder Return (TSR) performance targets. The fair value of all other awards is the

share price at the date of grant.

The fair value of the estimated number of options and awards that are expected to vest is expensed to

the income statement on a straight-line basis over the period that employees’ services are rendered, with

a corresponding increase in shareholders’ equity. Where non-market performance criteria (such as

sustainability targets) attached to the share options and awards are not met, any cumulative expense

previously recognised is reversed. For awards with market-related performance criteria (such as TSR),

an expense is recognised irrespective of whether the market condition is satisfied.

The social security obligations payable in connection with the grant of the share options are an integral

part of the grant itself and the charge is treated as a cash-settled transaction. A deferred tax balance is

recognised based on the intrinsic value of the outstanding options.

Financial instruments

Financial instruments are recognised when easyJet becomes a party to the contractual provisions of the

relevant instrument and derecognised when it ceases to be a party to such provisions. Financial assets

are also derecognised (written-off) when the Group has no reasonable expectation of recovering the

financial asset.

With the exception of trade receivables that do not contain a significant financing component, financial

instruments are initially measured at fair value plus or minus (in the case of a financial asset or financial

liability not at fair value through the income statement) directly attributable transaction costs. Trade

receivables that do not contain a significant financing component are initially measured at the

transaction price.

Where market values are not available, the fair value of financial instruments is calculated by discounting

expected cash flows at prevailing interest rates and by applying period end exchange rates.

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1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

The equity investment in The Airline Group Limited is measured at fair value. Movements in fair value are

assessed at each reporting period and recorded in other comprehensive income. The fair value is

measured using a dividend income model in accordance with IFRS 13 requirements. See note 25 for

further details.

Non-derivative financial assets

Non-derivative financial assets are classified and measured according to easyJet’s business model for

managing a specified group of financial assets, and the nature of the contractual cash flows arising

from that group of financial assets.

Financial assets measured at amortised cost

Subsequent to initial recognition, this classification of financial asset is measured at amortised cost using

the effective interest rate method.

Financial assets are measured at amortised cost when both of the following criteria are met:

> the financial asset is held within a business model whose objective is to hold financial assets in order

to collect contractual cash flows; and

> the contractual terms of the financial asset give rise on specified dates to cash flows that are solely

payments of principal and interest on the principal amounts outstanding.

Financial assets measured at amortised cost include refundable lease deposits and other refundable

lease contributions, restricted cash, trade and other receivables, money market deposits, and cash and

cash equivalents (excluding money market funds).

Restricted cash comprises cash deposits which have restrictions governing their use and is classified as a

current or non-current asset based on the estimated remaining length of the restriction. Movements in

restricted cash are shown within financing activities in the consolidated statement of cash flows as the

movements arise from cash held relating to guarantees.

Cash and cash equivalents comprise cash held in bank accounts with no access restrictions and bank

term deposits and tri-party repos repayable on demand or maturing within three months of inception.

Money market deposits comprise bank term deposits and tri-party repos maturing greater than three

months from inception.

Financial assets measured at fair value through other comprehensive income

On initial recognition, equity investments, excluding interests in associates, are irrevocably designated as

measured at fair value through other comprehensive income. Subsequently they are measured at fair value

with changes recognised in other comprehensive income with no recycling of these gains and losses.

Financial assets measured at fair value through the income statement

Financial assets are measured at fair value through the income statement when they do not meet the

criteria to be measured at amortised cost or at fair value through other comprehensive income.

Subsequent to initial recognition, this classification of financial assets is measured at fair value through

the income statement.

Financial assets measured at fair value through the income statement compromised of money market

funds as at 30 September 2022; no such assets were held on 30 September 2023.

Impairment of financial assets

At each reporting date easyJet recognises a loss allowance for expected credit losses on financial assets

measured at amortised cost.

In establishing the appropriate amount of loss allowance to be recognised, easyJet applies either the

general approach or the simplified approach, depending on the nature of the underlying group of

financial assets.

General approach – impairment assessment

The general approach is applied to the impairment assessment of refundable lease deposits and other

refundable lease contributions, restricted cash, money market deposits and cash and cash equivalents.

Under the general approach easyJet recognises a loss allowance for a financial asset at an amount equal

to the 12-month expected credit losses calculated using expected future default probabilities, unless the

credit risk on the financial asset has increased significantly since initial recognition, in which case a loss

allowance is recognised at an amount equal to the lifetime expected credit losses.

Simplified approach – impairment assessment

The simplified approach is applied to the impairment assessment of trade and other receivables.

Under the simplified approach easyJet recognises a loss allowance for a financial asset at an amount

equal to the lifetime expected credit losses using a historical loss probability method.

Non-derivative financial liabilities

Non-derivative financial liabilities are initially recorded at fair value less directly attributable transaction

costs, and subsequently at amortised cost, and include trade and other payables and borrowings.

Interest expense on borrowings is recognised using the effective interest method.

Borrowings are classified as current liabilities unless there is an unconditional right to defer settlement of

the liability for at least 12 months after the reporting period date.

Financial liabilities measured at amortised cost

Subsequent to initial recognition at cost, this classification of financial liability is measured at amortised cost.

Financial liabilities measured at amortised cost include trade and other payables, lease liabilities and

borrowings.

Derivative financial instruments and hedging activities

Derivative financial instruments are measured at fair value through the income statement with the

exception of derivative financial instruments that are designated as a hedging instrument in a cash flow

hedge relationship.

easyJet uses foreign currency forward exchange contracts to hedge foreign currency risks on

transactions denominated in US dollars, euros and Swiss francs. These transactions primarily affect

revenue, fuel, lease costs, holiday accommodation costs, pre-delivery payments, and the initial carrying

value of owned aircraft. easyJet also uses cross-currency interest rate swaps to hedge currency and

interest rate risk on certain borrowings, and jet fuel forward swap and option contracts to hedge fuel

price risks. easyJet has a small number of euro-denominated lease contracts which result in a committed

schedule of euro lease rental payments; these are matched against forecasted euro revenue cash flows

to provide a cash flow hedge against the sterling/euro exchange rate. Hedge accounting is applied to

those financial instruments that are designated as cash flow hedges or fair value hedges.

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1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

Fair value hedges

Changes in the fair values of derivatives that are designated and qualify as fair value hedges are

recorded in the income statement, together with any changes in the fair values of the hedged assets or

liabilities that are attributable to the hedged risk. Any difference between the hedge item and hedge

instrument fair valuation is recorded as hedge ineffectiveness within the income statement.

Fair value changes in the derivative instrument attributable to the currency basis are not designated as

part of the hedged instrument. Such fair value changes are recognised through other comprehensive

income as cost of hedging and are recycled to the income statement on maturity or in the event of

hedge discontinuation, according to the nature of the underlying hedged item.

easyJet’s fair value hedges matured in February 2023 and there were therefore no fair value hedges

accounted for at year end.

Cash flow hedges

Gains and losses arising from changes in the fair value of foreign exchange forwards, jet fuel forward

swaps, jet fuel options and cross-currency interest rate swap contracts designated as cash flow hedges

are recognised in other comprehensive income and deferred in the hedging reserve to the extent that

the hedges are determined to be effective.

All foreign exchange contracts in a cash flow hedge relationship are designated on a forward basis with

the full fair value as the hedge instrument. Jet fuel option contracts in a cash flow hedge relationship

are designated using the intrinsic value of the derivative as the hedge instrument only. The time value

element of the full fair value for these derivatives is recognised through other comprehensive income

as a cost of hedging and recycled to the income statement at the same time as the hedge item also

impacts the income statement.

Fair value changes in a foreign currency derivative instrument attributable to the currency basis are not

designated as part of the hedged instrument. Such fair value changes are recognised through other

comprehensive income as a cost of hedging, and are recycled to the income statement on maturity

or in the event of hedge discontinuation, according to the nature of the underlying hedged item.

When the hedged forecast transaction relates to an item of property, plant and equipment, the relevant

accumulated gains and losses are transferred from the hedging reserve and included in the initial carrying

amount of that purchased asset. Otherwise they are recognised in the income statement in the same

period in which the hedged transaction affects the income statement and against the same line item.

In the event that a hedged forecast transaction is no longer expected to occur, any related gains and

losses are immediately transferred from the hedging reserve and recognised in the income statement.

Derivative instruments that have been derecognised from hedge relationships are classified as fair value

through the income statement thereafter with subsequent fair valuation movements being recognised

in the income statement.

Hedge accounting is discontinued when a hedging instrument is derecognised (e.g. through expiry,

disposal or termination of a derivative), or no longer qualifies for hedge accounting. Where the hedged

item continues to be expected to occur, the related gains and losses remain deferred in the hedging

reserve until the transaction takes place.

Hedge relationship

The Group determines that the criteria for each hedge accounting relationship are met where:

> all relationships demonstrate a strong economic correlation;

> the effects of credit do not dominate the change in value of the associated hedged risk; and

> all Group hedge relationships have a hedge ratio of one to one, aligning to the Group’s risk

management strategy .

Revenue recognition

easyJet categorises total revenue earned on the face of the income statement between passenger and

ancillary revenue, with ancillary revenue further categorised into airline ancillary revenue and holidays

incremental revenue.

Passenger revenue

Passenger revenue arises from the sale of flight seats and is recognised when the performance

obligation has been completed, which is when the flight takes place. Revenue recognised is the price

paid by the customer for the flight excluding air passenger tax; this includes amounts paid by ‘no-show’

customers, as such customers are not generally entitled to change flights or seek refunds once a flight

has departed.

Compensation payments made to customers (in respect of flight delays and cancellations) are offset

against revenues recognised up to the amount of the flight, with the excess compensation being

recorded within expenses. The liability for compensation payments not yet paid is measured based on

known eligible events, passengers impacted, and the best estimate of claim rates which is in part

informed by historical claim rates.

Airline flights are paid for at the point of booking. Unearned revenue from flights not yet flown is held in

the statement of financial position until it is realised in the income statement when the flight takes place.

If easyJet cancels a flight, unless a customer immediately rebooks on an alternative flight, at the point of

the cancellation the amount paid for the flight is derecognised from unearned revenue and a contract

liability is recognised within trade and other payables to refund the customer or provide a voucher or

flight transfer if requested. Vouchers issued by easyJet in lieu of refunds are held on the statement of

financial position in other payables as a contract liability (see note 16) until they are redeemed against a

new booking, at which point they are recognised as unearned revenue. Once vouchers expire or are

deemed to have a remote probability of being redeemed for a future booking they will be recognised as

revenue. For vouchers issued to customers in countries where regulations stipulate unused vouchers

should be refunded to the customer before the expiry of the statutory period, the required refunds have

been made.

Where customers do not request either a voucher, refund or flight transfer the liability continues to be

recognised in other payables, and breakage is applied when the likelihood of the customer exercising

their remaining rights to be repaid these amounts is considered remote.

Airline ancillary revenue

Sale of checked baggage, allocated seating, change fees and other

Revenue is measured as the price paid by the customer for the service booked and is recognised at a

point in time, which is when the flight takes place. Unearned revenue includes the amount paid for these

services and is treated in line with unearned revenue for the sale of flight seats.

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1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

Partner revenue and in-flight sales

Revenue is measured at the value of the commission earned as easyJet is deemed to be the agent and

does not control the related services or goods. The key consideration to reach this conclusion is that the

partner is deemed to be responsible for inventory risk and fulfilment of the goods and services. The

revenue is recognised at a point in time which is when the service takes place. The exception is

commission earned from travel insurance, where revenue is recognised at the time of booking as

easyJet acts solely as the appointed representative of the insurance company.

Cancellation fees

Revenue is measured at the amount paid for the cancellation and is recognised evenly at a point in time,

when the cancellation requested by the customer is processed.

easyJet plus

Revenue is measured at the amount paid for the annual membership and is recognised evenly over the

membership period.

Holidays incremental revenue

Package holidays revenue (excluding flights which are recognised as passenger revenue) is measured as

the price paid by the customer for the service booked. It is referred to as Holidays incremental revenue

in the income statement. The performance obligation is satisfied over time with the revenue recognised

evenly across the length of the holiday. This includes amounts paid by ‘no-show’ customers.

Package holiday deposits are paid for at the point of booking. Unearned revenue from the non-flight

elements of package holidays for which the customer has paid but the service has not yet taken place,

is held in the statement of financial position until it is realised in the income statement when the

performance obligation is complete. Package holiday balances due from customers are offset against

unearned revenue until paid in full, due 28 days before departure.

If easyJet cancels a holiday, and the customer does not elect to rebook or receive a voucher, the price of

the holiday (including flights) is refunded to the customer. If the customer elects to receive a voucher,

the voucher is held on the statement of financial position in other payables as a contract liability (see

note 16) until they are redeemed against a new booking, at which point they are recognised as unearned

revenue. Vouchers that expire or are deemed to have a remote probability of being redeemed for a

future booking will be recognised as revenue.

Operational costs and income

Costs and income are presented in the income statement based on the nature of the cost/income as

this is most relevant to enable users of the financial statements to understand easyJet’s financial

performance. Costs are expensed as incurred either at the point the goods or service is transferred,

or over time to reflect when the benefits are received (for example holidays accommodation costs

recognised over the period the holiday is taken). Separate financial statement line items are shown for

material income and expenses; the other costs and other income lines include items not reported in the

separate material line items. Other income includes insurance receipts, supplier compensation payments,

rental income and gains on sale of intangible assets. Other costs are expensed as incurred and include

disruption costs, IT costs, cost of third-party providers, employee costs for sales, marketing and

administration teams, wet lease costs and insurance. Gains/losses on sale and leaseback transactions

are recognised as non-headline in other income/other costs as applicable.

Finance charge/income

Interest payable/receivable and other financing charges/income includes interest expense/income on

bank and borrowings which is recognised using the effective interest method, interest on lease liabilities

which is recognised using the interest rate implicit in the lease, and fair value movements of derivative

financial instruments that are not designated hedging instruments in a cash flow hedge arrangement.

Net exchange gains/losses on statement of financial position monetary assets and liabilities are

presented as a separate financial statement line item.

Within the statement of cash flows, interest paid on bank borrowings and leases is included within net

cash generated from/used in operating activities as allowable by IAS 7, and this includes the settlement

of the derivatives used to hedge borrowings. In addition, the settlement of derivatives relating to cash

flows for ineffective and fair value derivatives through the income statement are also shown within

operating activities as they relate to transactions that primarily affect revenue, fuel and lease costs. The

amount recognised in settlement of derivatives includes cash flows arising from the maturity of cross-

currency interest rate swaps in the period. The settlement of operational hedged derivatives that have

already been recycled through the income statement are included in the operating result.

SEGMENTAL REPORTING

easyJet has two operating segments, being its Airline business, which operates easyJet’s route network,

and the Holidays business, which sells holiday packages. The Chief Operating Decision Maker (CODM)

has been assessed as being the easyJet plc Board, which receives regular reporting on the Airline and

Holidays’ results in order to make resource allocation decisions. Presentation of separate segmental

reporting is included in note 8.

Geographic revenue is allocated on the following basis:

> revenue earned from customers is allocated according to the location of the first departure airport on

each booking; and

> commission revenue earned from partners is allocated according to the domicile of each partner.

Revenue by country of origin has been provided where revenues from external customers attributed to

an individual foreign country are material.

Passenger revenue recognised within the Airline segment includes intra-segment sales of flights to the

Holidays segment. Sales of seats are made between Airline and Holidays on a commercial basis whereas

the pricing of hold bags is based on historical average pricing to direct airline customers. Passenger

revenue is recognised in the Airline segment when the flight takes place.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received.

Loans provided and/or guaranteed by governments that represent market rates of interest are recorded

at the amount of the proceeds received and recognised within borrowings. All existing loans are

considered to be at market value. Grants that compensate the Group for expenses incurred are

recognised in the income statement in the relevant financial statement line on a systematic basis in the

periods in which the expenses are recognised to present the net expense to the Group.

Alternative performance measures (APMs)

A number of APMs are disclosed within the financial statements on pages 142 to 188. In the Directors’

opinion, these APMs provide additional understanding to users of the financial statements in their

assessment of underlying performance. Refer to the glossary for a list of APMs disclosed in the financial

statements, including definitions and reconciliations to IFRS measures.

Included in the income statement is the sub-total EBITDAR which is a measure of earnings before

interest, taxes, depreciation, amortisation and aircraft rental.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

1A. SIGNIFICANT ACCOUNTING POLICIES (continued)

New and revised standards and interpretations

A number of amended standards became applicable during the current reporting period. The Group did

not have to change its accounting policies or make retrospective adjustments as a result of adopting

these standards. The amendments that became applicable for annual reporting periods commencing

on or after 1 January 2022, and did not have a material impact were:

> Amendments to IFRS 3 – Business Combinations – Reference to the conceptual framework

> Amendments to IAS 16 – Property, plant and equipment – Proceeds before intended use

> Amendments to IAS 37 – Provisions, contingent liabilities and contingent assets – Onerous contracts:

Cost of fulfilling a contract

> Annual improvements to IFRS 1, IFRS 9, IAS 41 and illustrative examples accompanying IFRS 16 Leases

There are no standards that are issued but not yet effective that would be expected to have a material

impact on the entity in the current or future reporting periods and on foreseeable future transactions.

1B. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES

The preparation of the financial statements in conformity with generally accepted accounting principles

requires management to make judgements as to the application of accounting standards to the

recognition and presentation of material transactions, assets and liabilities within the Group, and the use

of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of

the financial statements, and the reported amounts of income and expenses during the reporting

period. Estimations are based on management’s best evaluation of a range of assumptions, however,

events or actions may mean that actual results ultimately differ from those estimates, and these

differences may be material. The estimates and the underlying assumptions are reviewed regularly.

1B. (I) CRITICAL ACCOUNTING JUDGEMENTS

The following are the critical judgements, apart from those involving estimation (which are dealt with

separately below), that the Directors have made in the process of applying the Group’s accounting

policies and that have the most significant effect on the amounts recognised and presented in the

financial statements.

Classification of income or expenses between headline and non-headline items (note 5)

Non-headline items are those where, in management’s opinion, their separate reporting provides an

additional understanding to users of the financial statements of easyJet’s underlying trading

performance, and which are significant by virtue of their size and/or nature. In considering the

categorisation of an item as non-headline, management’s judgement includes, but is not limited to,

a consideration of:

> whether the item is outside of the principal activities of the easyJet Group (being to provide point-to-

point airline services and package holidays);

> the specific circumstances which have led to the item arising, including, if extinguishing an item from

the statement of financial position, whether that item was first generated via headline or non-headline

activity. The rebuttable presumption being that when subsequently extinguishing an item from the

statement of financial position, any impact on the income statement should be reflected in the same

way as that which was used in the initial creation of the item;

> if the item is irregular in nature; and,

> whether the item is unusual by virtue of its size.

Non-headline items may include impairments, amounts relating to corporate acquisitions and disposals,

expenditure on major restructuring programmes and the gain or loss resulting from the initial recognition

of sale and leaseback transactions.

Consolidation of easyJet Switzerland S.A.

Judgement has been applied in consolidating easyJet Switzerland S.A. as a subsidiary on the basis that

the Company exercises a dominant influence over the undertaking. A non-controlling interest has not

been reflected in the consolidated financial statements on the basis that the holders of the remaining

51% of the shares have no entitlement to any dividends from that holding and the Company has an

option to acquire those shares for a predetermined minimal consideration.

1B. (II) CRITICAL ACCOUNTING ESTIMATES

The following critical accounting estimates include judgements or complexity and are the major sources

of estimation uncertainty that have a significant risk of resulting in a material adjustment to the carrying

amounts of assets and liabilities within the next year.

Owned aircraft carrying values – £3,846 million (2022: £3,598 million) (note 11)

The key estimates used in arriving at aircraft carrying values are the UELs and residual values of the

owned aircraft.

Aircraft are depreciated over their UEL to their residual values in line with the Property, Plant and

Equipment Accounting Policy. The UEL is based on easyJet’s long-term fleet plan and intended utilisation

of the current fleet, which include long-term assumptions of market conditions and customer demands,

which by their nature are inherently uncertain.

Residual value estimates for aircraft are based on independent aircraft valuations. The valuations are based

on an assessment of the current and future state of the global marketplace for specific aircraft assets. Should

the marketplace for an asset class deteriorate unpredictably, there could be a risk that the recoverable

amount for some aircraft assets would fall below their current carrying value or that residual values are

subject to downward adjustment. If the market expectation of residual value of the easyJet aircraft varied by

+/- 10% this would result in an approximate +/- £7 million impact on annual depreciation rates.

Owned and leased aircraft asset recoverable amounts are included in the Airline CGU and are therefore

subject to review for impairment annually or when there is an indication of impairment within the Airline

CGU. Further details of the impairment testing applied are included in note 10.

Aircraft maintenance provisions – £753 million (2022: £636 million) (note 19)

easyJet incurs liabilities for maintenance costs arising during the lease term of leased aircraft. These

costs arise from legal and constructive contractual obligations relating to the condition of the aircraft

when it is returned to the lessor. To discharge these obligations, it is usual for easyJet to carry out at

least one heavy maintenance check on each of the engines and the airframe of the aircraft during the

lease term. A material provision representing the estimated cost of this obligation is built up over the

course of the lease. The estimates and assumptions used in the calculation of the provision are reviewed

at least annually, and when information becomes available that is capable of causing a material change

to an estimate, such as the renegotiation of end of lease return conditions, increased or decreased

aircraft utilisation, or changes in the cost of heavy maintenance services and the expected uplift in

future prices.

A significant portion of the future maintenance costs and cost increases are under contract and provide

certainty to the provision. Where cost increases are not under contract, an estimation of the likely future

increases are made in the calculation of the provision. Given the significant value of the provision, the

provision is sensitive to changes in the future increase of uncontracted costs. An additional 4% cost

uplift on uncontracted costs over the future years used in the provision would result in a £28 million

increase in the provision. Additionally, with many maintenance costs incurred in US dollars, the provision

remains sensitive to changes in the GBP/USD exchange rate. A significant +/- 10 cent change in the GBP/

USD exchange rate would impact the provision by -£48 million/+£56 million respectively.

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1B. (II) CRITICAL ACCOUNTING ESTIMATES (continued)

The rates used to discount the provision to arrive at a present value are based on observable market

rates as an estimate of the relevant risk free rate.

The provision can also be materially influenced by the maintenance status of aircraft when they enter

the easyJet fleet. To give flexibility to the fleet plan easyJet may lease ‘mid-life’ aircraft. When mid-life

aircraft enter the fleet, a ‘catch-up’ maintenance provision is created to reflect the maintenance

obligation for the flying cycles undertaken before the aircraft entered the easyJet fleet. The trigger for

such increases to the provision is the lease contract and as such any future mid-life lease events are not

reflected in the current provision. It is of note that where contractually agreed a mid-life delivery asset is

also created when the mid-life leased aircraft enter the fleet, creating a separate related asset on the

statement of financial position.

Goodwill and landing rights – £520 million (2022: £523 million) (note 10)

It is management’s judgment that there are two separate CGUs which generate largely independent

cash flows, these being easyJet’s Airline route network and its Holidays business. The recoverable

amount of goodwill and landing rights has been determined based on value in use calculations for the

airline route network CGU as they are wholly attributable to it. The value in use is determined by

discounting future cash flows to their present value. When applying this method, easyJet relies on a

number of key estimates including the ability to meet its strategic plans, future fuel prices and exchange

rates, long-term economic growth rates for the principal countries in which it operates, and its pre-tax

weighted average cost of capital. Strategic plans include assessments of the future impact of climate

change on easyJet to the extent these can be estimated. This includes, for example, the future

estimated price of ETS allowances, the phasing out of the free ETS allowances from 2024, the expected

price and quantity required of SAF usage and currently estimated fleet renewals. The impact of longer-

term climate change risks that are not part of the strategic plans has been considered as part of the

stress testing and plausible scenarios modelled.

Fuel prices and exchange rates continue to be volatile in nature and the ability to pass these changes on

to the customer is a critical judgement that requires estimation. In addition, assumptions over customer

demand levels could have a significant effect on the impairment assessment performed. Any future

events that would lead to extended travel restrictions or fleet grounding may impact future impairment

or useful economic life assessments. The stress testing considered as part of the overall impairment

assessment takes into account different assumptions for these key estimates, see note 10 for details.

Recoverability of deferred tax assets – £442 million (2022: £443 million) (note 6)

The deferred tax asset balances include £442 million (2022: £443 million) arising on full recognition of the

UK trading tax losses accumulated at the statement of financial position date. The Group has concluded

that these deferred tax assets will be fully recoverable against the unwind of taxable temporary differences

and future taxable income based on the long-term strategic plans of the Group. Where applicable the

financial projections used in assessing future taxable income are consistent with those used elsewhere

across the business, for example in the assessment of going concern. These assessments include the

expected impact of climate change on easyJet, and the future financial impact within cash flow

projections, including the future estimated price of ETS allowances, the phasing out of the free ETS

allowances from 2024, the expected price and quantity required of SAF usage and fleet renewals.

The tax losses for which a deferred tax asset has been recognised are expected to be utilised within the

next six years, assessed by considering probable forecast future taxable income. The probable forecast

future taxable income includes the impact of the expected unwind of taxable temporary differences as

well as the effect of Full Expensing Relief for qualifying capital expenditure. Probable forecast future

taxable income includes an incremental and increasing risk weighting to represent higher levels of

uncertainty in future periods.

The period over which the loss is utilised has been stress tested by assessing probable future taxable

income for the next three years, based on the same risk weightings to those applied above, but

assuming no profit growth from the end of a three year forecast period. The resultant reduction in

forecast taxable profit calculated on this basis would extend the tax loss utilisation period by one year.

The tax losses can be carried forward indefinitely and have no expiry date.

In the 22 November 2023 Autumn Statement it was announced that full expensing relief, introduced in

the Finance (No.2) Act 2023, for qualifying expenditure incurred from 1 April 2023 to 31 March 2026 will

be made permanent. It is not substantively enacted at the statement of financial position date but the

Group is assessing the impact it may have on the recoverability of deferred tax assets for subsequent

financial years.

Defined benefit pension assumptions – £152 million gross obligation (2022: £140 million gross

obligation) (note 20)

The Swiss pension scheme meets the requirements under IAS 19 to be recognised as a defined benefit

pension scheme and the net pension obligation is recognised on the consolidated statement of financial

position. The measurement of scheme assets and obligations are calculated by an independent actuary

in line with IAS 19. The financial and demographic assumptions used in the calculation are determined by

management following consultation with the independent actuary with consideration of external market

movements and inputs. The calculation is most sensitive to movements in the discount rate applied,

which has been subject to significant volatility. A sensitivity analysis is included in note 20.

Liability for compensation payments – £62 million (2022: £74 million) (note 15)

easyJet incurs liabilities for amounts payable to customers who make claims in respect of flight delays

and cancellations, for which claims could be made up to six years after the event, and for reimbursement

of reasonable expenses incurred as a result of flight delays and cancellations. The key estimation in the

liability is the passenger claim rate for compensation payments. The estimation carries a level of

uncertainty as it is based on customer behaviour. The basis of the estimates included in the liability are

reviewed at least annually and when information becomes available that may result in a material change

to the estimate. Should the claim rate for compensation paid to customers increase by 2% across the six-

year liability period, it would result in an addition to the year end provision of £15 million.

Vouchers issued – £58 million (2022: £111 million) (note 16)

It is currently easyJet policy in the event of flight cancellations to offer customers the option to accept

vouchers in lieu of cash refunds. The liability for these vouchers is classified under other payables until

the voucher is redeemed against a future booking, when it is reclassified to unearned revenue.

For airline flight vouchers, where the likelihood of the contractual right being exercised is considered to

be remote, immaterial breakage has been applied. This has been estimated based on the utilisation rates

experienced to date, and these liabilities have been taken to the consolidated income statement as

revenue. The breakage was applied in the first half of the financial year ahead of a significant voucher

expiry deadline later in the financial year. That deadline was subsequently extended into the next

financial year to allow customers the maximum opportunity to utilise their vouchers. Utilisation patterns

since this extension do not suggest that the breakage recognition should be reversed.

For vouchers issued to customers in countries where regulations stipulate unused vouchers should be

refunded to the customer before the expiry of the statutory period, the required refunds have been made.

Applying breakage to the balance of the remaining airline flight vouchers at 30 September 2023 at a rate

of 10% would result in a reduction in the liability of c.£5 million.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

2. NET FINANCE CHARGES

2023

£ million

2022

£ million

Interest receivable and other financing income

Interest income (132) (21)

Hedge discontinuation and ineffectiveness

– (5)

(132) (26)

Interest payable and other financing charges

Hedge discontinuation and ineffectiveness

1 –

Interest payable on bank and other borrowings 132 98

Interest payable on lease liabilities 46 43

Other interest payable 1 2

180 143

Net exchange (gain)/loss on monetary assets and liabilities

(27) 64

Net finance charges 21 181

1) See note 26 for details.

2) Included within net exchange (gain)/loss on monetary assets and liabilities is an £84 million loss (2022: £127 million gain)

relating to the fair value gain on US dollar foreign exchange derivatives designated as fair value through profit or loss.

3. PROFIT/(LOSS) BEFORE TAX

The following have been included in arriving at profit/(loss) before tax:

2023

£ million

2022

£ million

Depreciation of property, plant and equipment

Owned assets 271 264

Right of use assets 373 275

Loss on disposal of intangible assets 3 10

Loss on disposal of property, plant and equipment 10 7

(Reversal of impairment)/impairment of trade receivables (3) 7

Sale and leaseback loss – 21

Auditor’s remuneration

During the year, the Company obtained the following services from the Company’s auditor:

2023

£ million

2022

£ million

Company audit fee 0.1 0.1

Fees for audit of the Company’s subsidiaries and their associates

(including foreign partners) 1.4 1.0

1.5 1.1

In addition, easyJet incurred audit-related non-audit services fees of £0.2 million (2022: £0.4 million) from its

auditor. This includes the fee of £0.1 million (2022: £0.1 million) in respect of the half-year review performed.

During the year, other assurance related non-audit services fees totalling £0.3 million (2022: £0.3 million)

were also incurred, primarily in relation to our Airbus Proposed Purchase (2022: primarily in relation to

working capital procedures associated with a Class 1 transaction).

The final fees for the audit of the Company’s subsidiaries and their associates (including foreign partners)

for financial year ended 30 September 2022 were £1.1 million.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

4. EMPLOYEES

The average monthly number of people employed by easyJet was:

2023

Number

2022

Number

Flight and ground operations 14,598 12,906

Sales, marketing and administration 1,339 1,045

15,937 13,951

Employee costs for easyJet were:

2023

£ million

2022

£ million

Wages and salaries 888 745

Social security costs 129 100

Pension costs 97 77

Share-based payments 18 26

1,132 948

Included in the pension costs is £6 million (2022: £7 million) related to pension schemes treated as a

defined benefit scheme under IAS 19.

Included in employee costs is a net debit of £2 million (2022: £nil million) from redundancy and

restructuring costs. The costs are the result of small-scale employee redundancy programmes in the

year in addition to further non-headline costs arising from the previously announced restructuring

programmes in Germany (see note 5 for further detail).

The amounts received under government furlough schemes are offset against employee costs in the

income statement. Refer to note 28 for further details.

Key management compensation was as follows:

2023

£ million

2022

Restated

£ million

Short-term employee benefits 14 11

Share-based payments 2 3

16 14

1) Key management compensation has been restated to include bonus payments, the short-term employee benefits

previously disclosed was £7 million.

The Directors of easyJet plc and the other members of the Airline Management Board are easyJet’s key

management as they have collective authority and responsibility for planning, directing and controlling

the business.

Emoluments paid or payable to the Directors of easyJet plc were:

2023

£ million

2022

£ million

Remuneration 5 3

5 3

Details of Directors’ remuneration are disclosed in the Directors’ remuneration report on pages 113 to 130.

5. NON-HEADLINE ITEMS

An analysis of the amounts presented as non-headline is given below:

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Sale and leaseback loss – 21

Restructuring charge 1 –

Loss on disposal of landing rights 3 10

Fair value adjustment and hedge discontinuation credit – (1)

Correction of prior year error 19 –

Total non-headline charge before tax 23 30

Tax credit on non-headline items (6) (8)

Total non-headline charge after tax 17 22

Sale and leaseback loss

During the year, easyJet completed the sale and leaseback of eight A319 aircraft (2022: ten). There was a

£nil million impact in the income statement (£6 million loss recognised in other costs offset by £6 million

gain recognised in other income) for the sale and leaseback of the eight aircraft during the year (2022:

£21 million loss recognised in other costs).

Restructuring

As a result of the downsizing of operations at Berlin Brandenburg Airport, announced in the previous

financial year, in the current year easyJet returned an additional number of landing right ‘slots’ held at the

airport relating to our summer 2023 flying schedule. As noted last year, the slots in Berlin were acquired

as part of the acquisition of Air Berlin’s operations in 2017. An allocation of the purchase price to the

surrendered slots has been estimated and, as no consideration was received in return for giving back the

slots, recognised as a loss on disposal of an intangible asset. This resulted in a non-headline restructuring

charge of £3 million (2022: £10 million). Additionally, net restructuring charges of £1 million (2022: £nil

million) representing additional costs arising from previously announced restructuring programmes in

Germany, have been incurred in the period. As at 30 September 2023, there were unpaid amounts of

£6 million (2022: £15 million) representing remaining redundancy cases which have not been finalised

and settled at the end of the financial year.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

5. NON-HEADLINE ITEMS (continued)

Hedge discontinuation

Hedge discontinuation relates to the cumulative fair value of financial derivatives at the time of being

discontinued from a previous hedge accounting relationship. No hedges were discontinued in the year

ended 30 September 2023.

In accordance with IFRS 9, hedge effectiveness testing is performed on a regular, periodic basis. For

cash flow hedges this includes an assessment of highly probable future cash exposures with the

amount compared to the notional value of derivatives held in a hedge relationship. In the year ending

30 September 2022, this resulted in a £1 million net credit related to these discontinued derivatives held

in other comprehensive income being immediately recorded in the income statement.

Correction of prior year error

In performing a review of foreign currency translation, an immaterial error was identified in a third-party

system relating to aircraft lease modifications which occurred in FY21 and the depreciation of the

corresponding right of use assets. The required correction to the statement of financial position at

30 September 2023 of £19 million has been posted to depreciation on those right of use assets. This has

been disclosed as a non-headline item as it is an irregular, immaterial error orginating in an earlier

financial year.

Tax on non-headline items

After the necessary tax adjustments, which principally relate to the sale and leaseback transactions in

both the current and comparative periods, there is a non-headline tax credit of £6 million (2022: £8

million) for the year.

6. TAX (CHARGE)/CREDIT

Tax on profit/(loss) on ordinary activities

2023

£ million

2022

£ million

Current tax

Foreign tax 11 7

Total current tax charge 11 7

Deferred tax

Temporary differences relating to property, plant and equipment 76 (50)

Other temporary differences 24 (2)

Adjustments in respect of prior years (3) 2

Remeasurement of opening balances due to change in tax rates – 4

Total deferred tax charge/(credit) 97 (46)

Total tax charge/(credit) 108 (39)

Effective tax rate 25.1% 18.7%

Reconciliation of the total tax charge/(credit)

The tax for the year is higher than (2022: lower than) the standard rate of corporation tax in the UK as

set out below:

2023

£ million

2022

£ million

Profit/(loss)before tax 432 (208)

Tax charge/(credit) at 22.0% (2022: 19.0%) 95 (40)

Income not chargeable for tax purposes:

Expenses not deductible for tax purposes 8 5

Share-based payments (3) 2

Adjustments in respect of prior years – deferred tax (3) 2

Difference in applicable rates for current and deferred tax 12 (12)

Attributable to rates other than standard UK rate (1) 1

Change in substantively enacted tax rate – 4

Movement in provisions – (1)

Total tax charge/(credit) 108 (39)

Current tax payable at 30 September 2023 amounted to £3 million (2022: £5 million payable) which is

solely related to tax payable in other European jurisdictions.

During the year ended 30 September 2023, net cash tax paid amounted to £12 million (2022: £4 million

net cash tax paid).

The Finance Act 2021 confirmed an increase of the UK corporation tax rate from 19% to 25% with effect

from 1 April 2023 and as such, the blended statutory current tax rate for the year ended 30 September

2023 is 22%. Temporary differences have been measured using the enacted tax rates that are expected

to apply when the liability is settled or the asset is realised, which is 25%.

On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK, introducing a global

minimum effective tax rate of 15%. The legislation implements a domestic top-up tax and a multinational

top-up tax, effective for accounting periods starting on or after 31 December 2023. This will therefore

apply to the Group for the year ended 30 September 2025 onwards. The Group has applied the

exception allowed by an amendment to IAS 12 to recognising and disclosing information about deferred

tax assets and liabilities related to top-up income taxes.

Tax on items recognised directly in other comprehensive (loss)/income or shareholders’ equity:

2023

£ million

2022

£ million

Credit/(charge) to other comprehensive (loss)/income

Deferred tax on change in fair value of cash flow hedges 14 (13)

Deferred tax on post-employment benefit (1) (10)

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

6. TAX (CHARGE)/CREDIT (continued)

Deferred tax

The net deferred tax (asset)/liability in the statement of financial position is as follows:

Accelerated

capital

allowances

£ million

Short-term

timing

differences

£ million

Fair value

(gains)/losses

£ million

Share-based

payments

£ million

Post-

employment

benefit

obligation

£ million

Trading loss

£ million

Total

£ million

At 1 October 2022 341 (26) 68 (1) (1) (443) (62)

Charged/(credited) to income statement 73 27 – (3) (1) 1 97

Charged to other comprehensive loss – – (14) – 1 – (13)

At 30 September 2023 414 1 54 (4) (1) (442) 22

Deferred tax liabilities expected to be settled:

£ million

Within 12 months –

After more than 12 months 22

At 30 September 2023 22

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and it is the

intention to settle these on a net basis.

Accelerated

capital

allowances

£ million

Short-term

timing

differences

£ million

Fair value

(gains)/losses

£ million

Share-based

payments

£ million

Post-

employment

benefit

obligation

£ million

Trading loss

£ million

Total

£ million

At 1 October 2021 373 (26) 51 (3) (9) (425) (39)

Charged/(credited) to income statement (32) – 4 2 (2) (18) (46)

Charged to other comprehensive income – – 13 – 10 – 23

At 30 September 2022 341 (26) 68 (1) (1) (443) (62)

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

7. EARNINGS/(LOSS) PER SHARE

Basic earnings/(loss) per share has been calculated by dividing the total profit/(loss) for the year by the

weighted average number of shares in issue during the year after adjusting for shares held in employee

benefit trusts.

To calculate diluted earnings/(loss) per share, the weighted average number of ordinary shares in issue

has been adjusted to assume conversion of all dilutive potential shares. Share options granted to

employees where the exercise price is less than the average market price of the Company’s ordinary

shares during the year are considered to be dilutive potential shares. Where share options are exercisable

based on performance criteria and those performance criteria have been met during the year, these

options are included in the calculation of dilutive potential shares. The calculation of diluted loss per

share does not assume conversion, exercise, or other issue of potential ordinary shares that would have

an antidilutive effect on earnings per share.

Headline basic and diluted earnings/(loss) per share are also presented, based on headline profit/(loss)

for the year.

Earnings/(loss) per share is based on:

2023

£ million

2022

£ million

Headline profit/(loss) for the year 341 (147)

Total profit/(loss) for the year 324 (169)

2023

million

2022

million

Weighted average number of ordinary shares used to calculate basic

earnings/(loss) per share 751 753

Weighted average number of ordinary shares used to calculate diluted

earnings/(loss) per share 758 753

Earnings/(loss) per share

2023

pence

2022

pence

Basic 43.1 (22.4)

Diluted 42.7 (22.4)

Headline earnings/(loss) per share

2023

pence

2022

pence

Basic 45.4 (19.6)

Diluted 45.0 (19.6)

8. SEGMENTAL AND GEOGRAPHICAL REVENUE REPORTING

Segmental analysis:

Year ended 30 September 2023

Airline

£ million

Holidays

£ million

Intergroup

transactions

£ million

Group

£ million

Passenger revenue 5,221 – – 5,221

Ancillary revenue 2,174 1,047 (271) 2,950

Total revenue 7,3 95 1,047 (271) 8,171

Airline operating costs including fuel (5,537) – – (5,537)

Holidays direct operating costs – (842) 260 (582)

Selling and marketing (189) (43) – (232)

Other costs and other income (654) (47) 11 (690)

Amortisation, depreciation and dry leasing (649) (5) – (654)

Net interest (payable)/receivable and other

financing income/(charges) (59) 11 – (48)

Foreign exchange gain 26 1 – 27

Headline profit before tax 333 122 – 455

Non-headline items (23) – – (23)

Total profit before tax 310 122 – 432

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

8. SEGMENTAL AND GEOGRAPHICAL REVENUE REPORTING (continued)

Year ended 30 September 2022 (re-presented)

Airline

£ million

Holidays

£ million

Intergroup

transactions

£ million

Group

£ million

Passenger revenue 3,816 – – 3,816

Ancillary revenue 1,585 495 (127) 1,953

Tota l revenue 5,401 495 (127) 5,769

Airline operating costs including fuel (4,129) – – (4,129)

Holidays direct operating costs* – (400) 127 (273)

Selling and marketing* (153) (20) – (173)

Other costs and other income (593) (32) – (625)

Amortisation, depreciation and dry leasing* (562) (4) – (566)

Net interest (payable)/receivable and other

financing income/(charges)* (117) – – (117)

Foreign exchange loss (63) (1) – (64)

Headline (loss)/profit before tax (216) 38 – (178)

Non-headline items (30) – – (30)

Total (loss)/profit before tax (246) 38 – (208)

The presentation of this note has been expanded in the current year to provide further information to

the users of the financial statements; additional financial statement line items are marked in the above

table with an *. Note that airline operating costs including fuel comprises operating costs that relate

solely to the airline segment, and similarly holidays direct operating costs are costs specific to the

Holidays segment. All other costs are incurred by both the Airline and Holidays segments.

The prior year has been re-presented in order to show the information on a consistent basis. This revised

presentation reflects the increased granularity of the Holidays segment available to the CODM and

plc Board.

As described in note 1, airline revenue is recognised at a point in time (when the flight takes place).

The Holidays revenue detailed in this note includes both flight revenue, recognised at the time the flight

takes place, and remaining ancillary revenue which is recognised over time, aligned to the duration of

the holiday. The holidays flight revenue is included in this note within ancillary revenue (with the

associated intergroup transaction) aligned to the presentation of revenue to the CODM and plc Board.

The intergroup transactions column represents revenue and cost transactions between Airline and

Holidays for the flight element of holiday packages. These intercompany transactions are eliminated

on consolidation.

Assets and liabilities are not allocated to individual segments and are not separately reported to, or

reviewed by, the CODM, and therefore have not been disclosed.

Geographical revenue:

2023

£ million

2022

(re-presented)

£ million

United Kingdom 4,345 2,845

France 852 674

Switzerland 791 626

Northern Europe (excluding Switzerland) 610 537

Southern Europe (excluding France) 1,434 995

Other 139 92

8,171 5,769

easyJet has assessed the materiality of geographical revenues and has disclosed revenues by country

of origin where such revenues are in excess of 10% of total revenue. For the year ended 30 September

2023, this included separate presentation of France and Switzerland which were previously included in

Southern Europe and Northern Europe respectively. The prior year has therefore been re-presented in

order to show the information on a consistent basis.

Geographical revenue is allocated according to the location of the first departure airport on each booking.

Southern Europe comprises countries lying wholly or mainly south of the border between Italy

and Switzerland.

easyJet holidays’ revenue is generated wholly from the United Kingdom.

easyJet’s non-current assets principally comprise its fleet of 183 (2022: 181) owned and 153 (2022: 139)

leased aircraft, giving a total fleet of 336 at 30 September 2023 (2022: 320). easyJet stored nil aircraft

under power by the hour agreements (2022: 3). 27 aircraft (2022: 27) are registered in Switzerland, 128

(2022: 132) are registered in Austria, nil (2022: 4) are registered in the Cayman Islands, and the remaining

181 (2022: 160) are registered in the United Kingdom.

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

9. DIVIDENDS

No dividend was paid in the year ending 30 September 2023 or 30 September 2022.

An ordinary dividend in respect of the year ended 30 September 2023 of 4.5 pence per share, or

£34 million, based on 10% headline profit after tax, is to be proposed at the forthcoming Annual General

Meeting. These financial statements do not reflect this proposed dividend.

10. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill

£ million

Other intangible assets

Landing

rights

£ million

Computer

software

£ million

Total

£ million

Cost

At 1 October 2022 365 158 135 293

Additions – – 91 91

Disposals – (3) (11) (14)

At 30 September 2023 365 155 215 370

Accumulated amortisation

At 1 October 2022 – – 76 76

Charge for the year – – 29 29

Disposals – – (11) (11)

At 30 September 2023 – – 94 94

Net book value

At 30 September 2023 365 155 121 276

At 1 October 2022 365 158 59 217

Goodwill

£ million

Other intangible assets

Landing

rights

£ million

Computer

software

£ million

Total

£ million

Cost

At 1 October 2021 365 168 100 268

Additions – – 35 35

Disposals – (10) – (10)

At 30 September 2022 365 158 135 293

Accumulated amortisation

At 1 October 2021 – – 51 51

Charge for the year – – 25 25

At 30 September 2022 – – 76 76

Net book value

At 30 September 2022 365 158 59 217

At 1 October 2021 365 168 49 217

Included within computer software, are internally generated intangible assets of £49 million (2022: £39

million, restated from £25 million due to a change in categorisation), and work in progress of £62 million

(2022: £25 million).

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

10. GOODWILL AND OTHER INTANGIBLE ASSETS (continued)

Value in use calculation

The recoverable amount of goodwill and other assets with indefinite expected useful lives has been

determined based on value in use calculations for the airline route network CGU, which holds these assets.

Pre-tax cash flow projections have been derived from the strategic plan approved by the plc Board for

the period up to 2028, using the following key assumptions:

2023 2022

Pre-tax discount rate (derived from weighted average cost of capital,

WACC) 11.4% 12.2%

Fuel price (US dollars per metric tonne, MT) 751 1,010

Long-term economic growth rate 2.0% 2.0%

Exchange rates:

US dollar 1.27 1.11

Euro 1.16 1.14

The annual impairment review has previously been carried out as at 30 September. In the current year,

the review was performed based on 30 June 2023 inputs in order to align with internal planning

timelines; 30 June will continue to be the date used going forward, in accordance with IAS 36.

The discount rate has been calculated based on the capital asset pricing model using external inputs where

relevant and the current cost of debt to the Group. The methodology is unchanged from the prior year. The

decrease in the discount rate has been driven primarily by a decrease in the cost of debt since the prior year

end. Both fuel price and exchange rates are volatile in nature. The fuel price has decreased significantly from

$1,010 /MT at 30 September 2022 to $751/MT as at 30 June 2023, reflecting the change in the underlying fuel

prices. Exchange rates and fuel price are based on spot rates as at 30 June 2023.

Cash flow projections for the period up to 2028 incorporate the long-term prospects of the Group,

taking into account growth expected by way of creating value through the business model. Cash flow

projections beyond the forecast period have been extrapolated using an estimated average of long-term

economic growth rates for the principal countries in which easyJet operates. The future impact of

climate change on the business has been incorporated into strategic plans, including the estimated

financial impact within the base case cash flow projections of the future estimated price of ETS

allowances, the phasing out of the free ETS allowances from 2024, the expected price and quantity

required of SAF usage, and fleet renewals.

The headroom of the value in use calculation over the carrying value of the relevant assets has increased

compared to 30 September 2022. This is primarily due to the strengthening of sterling against the US

dollar and the associated impact on costs including fuel, as well as the decrease in the discount rate.

Stress testing has been performed on key inputs to the value in use calculation, including the

assumptions listed above and the strategic plan used as the base for the calculation. The impairment

model is sensitive to a sustained and significant adverse movement in foreign currency exchange rates

(other than movements that are included in the fuel pass-through assumption) and forecast operating

profits to the extent that no other compensating action is taken. It has been assumed that any

significant future fuel price increase would be recovered through revenue pass through. Individual

scenarios that have been deemed reasonably probable, in particular in relation to the current macro-

economic environment, do not give rise to an impairment. These scenarios include +/-10% on euro and

US dollar rates, +100 bps increase in WACC, reduced capacity of 5%, increased operating costs

(excluding fuel) of 3%, a fuel price increase of $100 per metric tonne and a flat growth rate.

Additional risks associated with climate change have also been stress tested, including sensitivities of

SAF usage and ETS costs, additional legal and technology costs, reduced demand and increased cost

of maintenance and replacement aircraft. These scenarios, both individually and in reasonably probable

combinations, do not give rise to an impairment.

Current intangible assets

2023

£ million

2022

£ million

Carbon offsetting VER 7 14

EU ETS, CH ETS and UK ETS carbon allowances 669 481

676 495

ETS allowances are required to offset the carbon emitted by flights. The scheme is settled on an annual

basis. The allowances required for annual settlement are held as current intangible assets, with the

associated liability included within accruals in trade and other payables (note 15).

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

11. PROPERTY, PLANT AND EQUIPMENT

Owned assets Right of use assets

Aircraft and

spares

£ million

Land and

buildings

£ million

Other

£ million

Aircraft and

spares

£ million

Other

£ million

Total

£ million

Cost

1 October 2022 4,988 44 68 2,416 45 7, 5 61

Additions 604 – 14 292 18 928

Aircraft sold and leased back (165) – – 44 – (121)

Disposals

(31) – (4) (100) (15) (150)

At 30 September 2023 5,396 44 78 2,652 48 8,218

Accumulated depreciation

At 1 October 2022 1,390 – 28 1,479 35 2,932

Charge for the year 263 – 8 368 5 644

Aircraft sold and leased back (86) – – – – (86)

Disposals

(17) – (4) (100) (15) (136)

At 30 September 2023 1,550 – 32 1,747 25 3,354

Net book value

At 30 September 2023 3,846 44 46 905 23 4,864

At 1 October 2022 3,598 44 40 937 10 4,629

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

11. PROPERTY, PLANT AND EQUIPMENT (continued)

Owned assets Right of use assets

Aircraft and

spares

£ million

Land and

buildings

£ million

Other

£ million

Aircraft and

spares

£ million

Other

£ million

Total

£ million

Cost

At 1 October 2021 4,802 44 55 2,335 45 7, 2 8 1

Additions

414 – 14 120 – 548

Aircraft sold and leased back (216) – – 25 – (191)

Disposals (12) – (1) (64) – (77)

At 30 September 2022 4,988 44 68 2,416 45 7, 561

Accumulated depreciation

At 1 October 2021 1,243 – 19 1,255 29 2,546

Charge for the year 255 – 9 269 6 539

Aircraft sold and leased back (102) – – – – (102)

Disposals (6) – – (45) – (51)

At 30 September 2022 1,390 – 28 1,479 35 2,932

Net book value

At 30 September 2022 3,598 44 40 937 10 4,629

At 1 October 2021 3,559 44 36 1,080 16 4,735

The net book value of aircraft includes £569 million (2022: £414 million) relating to advance payments for future deliveries and life limited parts not yet in use.

This amount is not depreciated.

The net book value of aircraft spares is £112 million (2022: £81 million).

The ‘Other’ categories are principally comprised of leasehold improvements, computer hardware, leasehold property, fixtures, fittings and equipment, and work

in progress in respect of property, plant and equipment projects. The work in progress as at 30 September 2023 was £14 million (2022: £20 million).

As at 30 September 2023, easyJet was contractually committed to the acquisition of two CFM LEAP engines (2022: four), and 158 (2022: 168) Airbus 320

family aircraft, with a total estimated list price

of $18.1 billion (2022: $19.2 billion) before escalations and discounts, for delivery in financial years 2024 (16

aircraft), 2025 (19 aircraft) and 2026 to 2029 (123 aircraft).

At the year end date easyJet had a commitment for six aircraft lease contracts, where the aircraft had not been delivered, with a combined value of £67

million. Subsequent to 30 September 2023 two aircraft have been delivered reducing the commitment to £45 million.

1) Right of use asset disposals includes the transactions to remove the fully depreciated assets from the statement of financial position when the leased assets are returned. The gross

value of the cost and associated accumulated depreciation was £100 million.

2) £(14) million Other asset values previously recorded as transfers have been reclassified as additions.

3) As Airbus no longer publishes list prices, the last available list price published in January 2018 has been used for the estimated list price, and the prior year comparator has been restated

to be on the same basis.

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12. OTHER NON-CURRENT ASSETS

2023

£ million

2022

£ million

Mid-life aircraft delivery assets 115 64

Deposits held by aircraft lessors 23 27

138 91

Mid-life aircraft delivery assets arise from maintenance obligations incurred on mid-life leased aircraft

before easyJet acquired the aircraft. They occur where a lessor has agreed to make a contribution to

easyJet’s maintenance costs to reflect the cycles already flown by the aircraft at the point it is delivered

to easyJet, plus or minus any maintenance utilised by easyJet that will not be paid for via a maintenance

shop visit. Depending on the contract terms, payment will be made either at the maintenance event date

or at the lease return date, the timing of which determines the current and non-current split of the asset.

The recoverability of this asset has been assessed by management, and the asset is considered to be

fully recoverable.

13. TRADE AND OTHER RECEIVABLES

2023

£ million

2022

(re-presented)

£ million

Trade receivables 115 85

Less provision for loss allowance (5) (8)

110 77

Prepayments

44 64

Accrued income

110 79

Other receivables 79 147

343 367

1) In the current year certain items have been reclassified from prepayments to accrued income to better represent the

nature of these assets. Prior year comparatives have been re-presented on the same basis. Prepayments and accrued

income were previously reported as £124 million and £19 million respectively.

Within the provision for loss allowance, £3 million has been credited to the income statement (2022: £7

million charged), with £nil million (2022: £nil million) being utilised in the year ended 30 September 2023.

Information about the impairment of trade receivables and the Group’s exposure to credit risk can be

found in note 26.

Other receivables comprises current mid-life aircraft delivery assets, prepaid maintenance costs, VAT and

trade deposits.

14. CASH AND MONEY MARKET DEPOSITS

2023

£ million

2022

£ million

Cash and cash equivalents (original maturity less than three months) 2,925 3,514

Money market deposits (original maturity more than three months) – 126

Current restricted cash – 4

Non-current restricted cash 2 3

2,927 3,647

Interest rates on money market deposits and restricted cash are repriced based on the prevailing market

rates of interest.

Restricted cash comprises:

2023

£ million

2022

£ million

Amount held in escrow accounts for legal cases – 4

Cash held as bank guarantee collateral 2 3

2 7

15. TRADE AND OTHER PAYABLES

2023

£ million

2022

(re-presented)

£ million

Trade payables 402 431

Accruals 1,096 983

Taxes and social security 52 38

Other payables

214 307

1,764 1,759

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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16. LIABILITIES RELATING TO CONTRACTS WITH CUSTOMERS

2023 2022 (re-presented)

Unearned

revenue

£ million

Other

£ million

Unearned

revenue

£ million

Other

£ million

Opening contract liabilities 1,043 158 846 277

Revenue deferred during the year 9,233 – 6,476 –

Revenue recognised during the year (8,775) (47) (6,279) (25)

Additional contract liability during the year – 147 – 161

Reduction in contract liability during

the year – (177) – (258)

FX impact during the year – (2) – 3

Closing contract liabilities 1,501 79 1,043 158

1) The prior year movements within unearned revenue have been re-presented in order to show the information on a

consistent basis. The change represents elimination on consolidation of intergroup revenue transactions of £137 million

between Airline and Holidays for the flight element of holiday packages.

Revenue deferred and recognised during the year is inclusive of airline passenger duty (APD) and other

charges, but net of intercompany eliminations.

2023 2022

Unearned

revenue

£ million

Other

£ million

Unearned

revenue

£ million

Other

£ million

Revenue recognised that was included in

the contract liability balance at the

beginning of the year 1,006 47 773 25

Other customer contract liabilities consist of amounts transferred from unearned revenue to other

payables due to the cancellation of flights and is made up of customer vouchers outstanding and

amounts where customers have not yet requested a refund, voucher or flight transfer. The movements in

‘additional contract liability’ and ‘reduction in contract liability’ arise as flights are cancelled, as vouchers

are awarded or exercised, and as customers advise on the exercise of their options following flight

cancellations. The breakage applied to the contract liability in the year is included in revenue recognised

during the year.

17. BORROWINGS

Current

£ million

Non-current

£ million

Total

£ million

At 30 September 2023

Eurobonds 433 1,462 1,895

433 1,462 1,895

Current

£ million

Non-current

£ million

Total

£ million

At 30 September 2022

Eurobonds 437 1,919 2,356

Term loan (UK Export Finance backed facility) – 841 841

437 2,760 3,197

Amounts above are shown net of issue costs or discounted amounts which are amortised at the

effective interest rate over the life of the debt instruments.

The February 2016 Eurobond with a carrying value of £437 million was repaid in February 2023. In

addition, the Term loan (UK Export Finance backed facility) with a carrying value of £841 million was

repaid in June 2023 and the facility was cancelled. At the same time easyJet entered into a new

undrawn facility for $1.75 billion. The October 2016 Eurobond with a carrying value of £433 million has

been repaid in October 2023. See note 26 for further information on borrowings.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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18. LEASES

easyJet holds aircraft under leasing arrangements that are recognised as right of use assets and lease

liabilities, with remaining lease terms ranging up to seven years. easyJet is contractually obliged to carry out

maintenance on these aircraft, and the cost of this is provided based on the number of flying hours, days and

cycles operated and the estimated cost of the maintenance events. Further details are given in note 1.

Information in respect of right of use assets, including the carrying amount, additions and depreciation,

is set out in note 11. Information in respect of the carrying value and interest arising on lease liabilities is

set out in note 25 and note 2 respectively. A maturity analysis of lease liabilities is set out below.

Amounts recognised in the statement of cash flows

Year ending

30 September

2023

£ million

Year ending

30 September

2022

£ million

Capital payments (218) (206)

Interest payments (46) (43)

Lease liabilities

30 September

2023

£ million

30 September

2022

£ million

Maturity analysis – contractual undiscounted cash flows

Less than one year (254) (297)

One to five years (690) (723)

More than five years (139) (258)

(1,083) (1,278)

Lease liabilities included in the statement of financial position

30 September

2023

£ million

30 September

2022

£ million

Current (217) (247)

Non-current (772) (866)

Tota l (989) (1,113)

easyJet also enters into short-term leases and low-value leases which are not recognised as right of use

assets and lease liabilities. The expense recognised in the year in relation to these leases is disclosed below.

Amounts recognised in income statement

Year ending

30 September

2023

£ million

Year ending

30 September

2022

£ million

Interest on lease liabilities 46 43

Expenses relating to low-value leases 8 4

Expenses relating to short-term wet leases 15 53

69 100

19. PROVISIONS FOR LIABILITIES AND CHARGES

Maintenance

provisions

£ million

Restructuring

£ million

Other provisions

£ million

Total provisions

£ million

At 1 October 2022 (re-presented)

636 15 40 691

Exchange adjustments (44) – – (44)

Release of provisions – (5) (6) (11)

Additional provisions recognised 257 6 17 280

Updated discount rates net of unwind

of discount (30) – – (30)

Utilised (66) (10) (9) (85)

At 30 September 2023 753 6 42 801

Year ended 30 September 2022 (re-presented)

Maintenance

provisions

£ million

Restructuring

£ million

Other provisions

£ million

Total provisions

£ million

At 1 October 2021 550 18 16 584

Exchange adjustments 93 – – 93

Release of provisions – (10) (1) (11)

Additional provisions recognised 141 10 31 182

Related to aircraft sold and leased back 6 – – 6

Updated discount rates net of unwind

of discount (71) – – (71)

Utilised (83) (3) (6) (92)

At 30 September 2022 636 15 40 691

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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19. PROVISIONS FOR LIABILITIES AND CHARGES (continued)

The maintenance provisions provide for maintenance costs arising from legal and constructive

obligations relating to the condition of the aircraft when returned to the lessor. Restructuring and other

provisions include amounts in respect of potential liabilities for employee-related matters and litigation

which arose in the normal course of business.

2023

£ million

2022

£ million

Current 175 102

Non-current 626 589

801 691

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

The split of the current/non-current maintenance provision is based on the expected maintenance event

timings. If actual aircraft usage varies from expectation the timing of the utilisation of the maintenance

provision could result in a material change in the classification between current and non-current.

Maintenance provisions are expected to be utilised within nine years.

Within other provisions are provisions for litigation matters. The split of these provisions between

current/non-current is based on the dates of expected court judgements. Provisions for restructuring

could be fully utilised within one year from 30 September 2023 and therefore are classified as current.

20. PENSIONS

Total pension costs of £97 million (2022: £77 million) recognised in employee costs (note 4), comprise

£91 million (2022: £70 million) related to defined contribution plans and £6 million (2022: £7 million)

related to defined benefit plans in Switzerland, including administration expenses of £nil million (2022:

£nil million).

The contributions payable to the relevant plans by the Group are at the rates specified in the rules of the

plans. The assets of the plans are held separately from those of the Group in funds under the control of

the trustees. Where there are employees who leave the plans before vesting fully in the contributions,

the ancillary contributions payable may be reduced by the amount of forfeited contributions.

Due to the minimum guarantees in place under Swiss law, the Swiss pension plan meets IAS 19

requirements to be treated as a defined benefit plan under IAS 19 despite the scheme having many

attributes akin to a defined contribution scheme. The Swiss Federal Council requires that a guaranteed

minimum interest rate must be achieved (currently 1%), plus a guaranteed minimum conversion rate to

be applied to accumulated pension on retirement (currently 6.8%) to the mandatory part of the benefits.

Swiss plans do not meet the definition of a Defined Contribution (DC) under IFRS as the obligation of the

employer does not stop at paying the pre-defined regular contributions due to these guarantees. Further

contributions might be required by the employer and the employee if the plan becomes underfunded

under local Swiss GAAP. This means Swiss plans are accounted for as Defined Benefit plans. The scheme

remains open to new employees.

The easyJet portion of the current service costs and the net interest cost are charged to the

consolidated income statement in the year to which they relate. Net interest is determined by multiplying

the net defined benefit liability by the discount rate at the start of the annual reporting period, adjusted

for any contributions and benefit payments in the period. Actuarial gains and losses are recognised in

the consolidated statement of comprehensive income and the consolidated balance reflects the net

surplus or deficit at the statement of financial position date.

The defined benefit obligation is calculated using the projected unit credit method. This reflects service

rendered by employees to the dates of valuation and incorporates actuarial assumptions including discount

rates used in determining the present value of benefits, projected rates of remuneration growth and mortality

rates. The present value of the defined benefit obligation is determined by discounting the estimated future

cash outflows using yields of high-quality corporate bonds. Management base the discount rate on the bond

yield in the Swiss bond market over 10 to 20 years, reflecting the currency in which the benefits will be paid,

and maturity terms approximating to the terms of the related pension obligation.

The key financial assumptions used to calculate the Swiss scheme liabilities under IAS 19 as at

30 September were:

2023 2022

Discount rate 1.90% 2.25%

Interest rate in savings 1.90% 2.25%

Salary increase 1.50% 1.00%

Mortality assumptions

70% BVG

2020 GT

70% BVG

2020 GT

Demographic assumptions

The demographic assumptions, including mortality assumptions used for the liability calculation, are

based on the most recent BVG 2020 tables (2022: BVG 2020 tables). These tables are based on the

experience during the period 2015 to 2019 of 14 of the largest autonomous Swiss pension plans, and

management consider these to be the best estimate available.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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20. PENSIONS (continued)

Sensitivities

The scheme asset values are sensitive to market conditions. The scheme liabilities are sensitive to

actuarial assumptions used to determine the scheme obligations. Significant changes in these

assumptions could potentially have a material impact on the consolidated statement of financial position.

The main assumptions are the discount rate, the rate of salary increase and the life expectancy rate. The

following table provides an estimate of the potential impact on the pension scheme of changing these

assumptions. The sensitivity analysis was performed by recalculating the defined benefit obligation with

the following parameters (all other parameters were not modified):

Increase/(decrease) in

defined benefit obligation

2023 2022

Discount rate +0.5% (5.6%) (5.4%)

-0.5% 6.3% 6.1%

Salary increase +0.5% 0.9% 1.0%

-0.5% (0.9%) (0.9%)

Life expectancy +1 year 0.6% 0.5%

-1 year (0.6%) (0.5%)

easyJet has an affiliation contract with Swiss Life Collective BVG Foundation. The assets of all affiliated

companies are pooled which diversifies the associated risk, and the scheme assets represent the share in

this Foundation. The Collective controls the asset management, is exposed to the risk, and guarantees

the savings capitals under the contract in place which is valid until 31 December 2027. The Board of

Trustees with the elected employees and employer’s representatives decide the investment strategy.

The current agreement is known as ‘fully insured’ by Swiss Life, which means that all underfunding,

investment and longevity risks are transferred from easyJet to Swiss Life over the term of the policy.

After the expiry date the benefits are no longer insured and all payments are the liability of the pension

scheme, unless the provider renegotiates the terms of the contract.

The amounts recognised in the consolidated income statement are as follows:

2023

£ million

2022

£ million

Current service costs defined benefit 6 8

Interest cost on net defined benefit obligation 3 1

Interest income on defined benefit asset (3) (1)

Past service costs (plan amendment) – (1)

Net defined benefit cost recognised in the income statement 6 7

Amounts recognised in other comprehensive (loss)/income:

2023

£ million

2022

£ million

Loss/(gain) from change in financial assumptions 5 (24)

Experience loss/(gain) 3 (16)

Return on plan assets – (1)

Recognised in the statement of other comprehensive (loss)/income 8 (41)

Movement in net deficit in the year:

2023

£ million

2022

£ million

Net deficit of the plan at 1 October 1 37

Net defined benefit cost recognised in the income statement 6 7

Net defined benefit loss/(gain) recognised in other comprehensive income 8 (41)

Company contributions (8) (8)

Foreign exchange – 6

Statement of financial position net deficit as at 30 September 7 1

A £3 million (2022: £3 million) prepayment representing cash paid over to Swiss Life in advance and not

yet utilised in the pension scheme is offset against the net deficit.

Expected employer cash contribution from the Group in the 2024 financial year is expected to be CHF 9

million (2023: CHF 9 million).

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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20. PENSIONS (continued)

Changes in the present value of the defined benefit obligation are as follows:

2023

£ million

2022

£ million

Present value of obligation at 1 October 140 152

Current service cost 6 8

Contributions paid by employees 5 5

Interest costs on defined benefit obligation 3 1

Contributions paid by plan participants 2 3

Benefit payments from scheme assets (9) (6)

Past service cost – (1)

Actuarial loss/(gain) arising from changes in financial assumptions 5 (24)

Actuarial loss/(gain) arising from experience adjustments 3 (16)

Foreign exchange (gain)/loss (3) 18

Present value of obligation at 30 September 152 140

Changes in the fair value of the scheme assets are as follows:

2023

£ million

2022

£ million

Fair value of the scheme asset as at 1 October 139 115

Interest income on the defined benefit plan assets 3 1

Contributions paid by Company 8 8

Contributions paid by employees 5 5

Contributions paid by plan participants 2 3

Benefit payments from scheme assets (9) (6)

Return on plan assets – 1

Foreign exchange (loss)/gain (3) 12

Fair value of the pension assets as at 30 September 145 139

2023 2022

Number of active participants 1,031 1,004

Average age of active insured members in years 41 40

Average time remaining before active employees reach final age in years 9 9

Average active life expectancy in years 52 52

Average years of service in years 10 10

The assets held do not have a quoted market price as they are within the affiliation contract with Swiss Life

Collective BVG Foundation. All assets are within the one class which takes the form of an insurance contract.

The weighted average duration of the defined benefit obligation of the Swiss pension scheme is 13 years

(2022: 12 years).

Maturity profile of defined benefit obligation

Expected benefit payments during fiscal year ending 30 September:

2023

£ million

2022

£ million

1 year 10 10

2 years 13 12

3 years 16 12

4 years 15 15

5 years 13 15

6 up to 10 years 70 65

21. SHARE CAPITAL

Number Nominal value

2023

million

2022

million

2023

£ million

2022

£ million

Allotted, called up and fully paid

At 30 September

Ordinary shares of par 27

pence each 758 758 207 207

easyJet’s employee benefit trusts hold the following shares. The cost of these shares has been deducted

from retained earnings:

2023 2022

Number of shares (million) 5 3

Cost (£ million) 21 24

Market value at year end (£ million) 21 9

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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22. SHARE INCENTIVE SCHEMES

easyJet operates the following share incentive schemes, all of which are equity settled. The change in

the number of awards outstanding, weighted average exercise prices during the year, and the number

exercisable at each year end were as follows:

Grant date

1 October

2022

million

Granted

million

Forfeited/

cancellations

million

Exercised

million

30 September

2023

million

Long Term Incentive Plan 1.1 – (0.8) – 0.3

Restricted Stock Unit 2.7 2.7 (0.3) (0.1) 5.0

Restricted Share Plan 0.5 0.4 (0.1) – 0.8

Save As You Earn scheme 16.3 6.3 (3.5) – 19.1

Share Incentive Plans 3.3 – (0.1) (0.2) 3.0

Deferred Annual Bonus Plan – 0.3 – – 0.3

23.9 9.7 (4.8) (0.3) 28.5

Grant date

1 October

2021

million

Granted

million

Forfeited/

cancellations

million

Exercised

million

30 September

2022

million

Long Term Incentive Plan 2.0 – (0.9) – 1.1

Restricted Stock Unit 1.4 1.3 – – 2.7

Restricted Share Plan – 0.6 (0.1) – 0.5

Save As You Earn scheme 10.9 12.3 (6.9) – 16.3

Share Incentive Plans 4.3 – (0.1) (0.9) 3.3

18.6 14.2 (8.0) (0.9) 23.9

Long Term Incentive Plan

The plan was open, by invitation, to Executive Directors and senior management, and provides for annual

awards of Performance Shares worth up to 250% of salary each year. The vesting of these shares is

dependent on TSR targets compared to FTSE-ranked companies at the start of the performance period.

All awards have a three-year vesting period. Awards made in December 2020 are assessed on

performance conditions measured over the three financial years ended 30 September 2023.

Restricted Stock Unit

The plan was awarded to the Airline Management Board, senior managers and some middle

management, and provided annual awards of Performance Shares worth up to 75% of salary each year.

All awards have a two or three-year vesting period, of which the vesting conditions are continued

employment.

Save As You Earn scheme

The scheme is open to all employees on the UK payroll. Participants may elect to save up to £500 per

month under a three-year savings contract. An option is granted by the Company to buy shares at a

discount of 20% from the market price on the day immediately preceding the date on which invitations

are sent; however the 2022 scheme was granted at a discount of 10% from the market price, and the

2020 scheme did not have a discount. At the end of the savings period, the option becomes exercisable

for a period of six months. Employees who are not paid through the UK payroll may participate in the

scheme under similar terms and conditions, albeit without the same tax benefits.

Restricted Share Plan

The plan is open, by invitation, to Executive Directors, the Airline Management Board and senior and

some middle management, and provides for annual awards of Performance Shares worth from 20% to

125% of salary, depending on role. All awards have either a two or three-year vesting period. For the

Executive Directors a three-year performance period plus two-year post-vesting holding period will apply.

The awards are subject to the following underpins: that easyJet does not fall below its minimum liquidity

target (such that a credit risk is triggered) through the vesting period and that there is satisfactory

governance performance including no ESG issues that result in material reputational damage to the

Company (as determined by the Board). The vesting of these shares is also dependent on continued

employment and assessment against performance underpins, as outlined in the Directors Remuneration

Report, measured over the vesting period.

Deferred Annual Bonus Plan

This plan represents the compulsory deferral of one-third of the annual bonus in shares for the Executive

Directors and one-fifth of the annual bonus for the Airline Management Board. All awards have a

three-year vesting period of which the vesting conditions are continued employment.

Weighted average exercise prices are as follows:

1 October 2022

Granted

Forfeited

Exercised

30 September

2023

Save As You Earn scheme

4.54 4.07 5.45 – 4.22

1) The exercise prices used to calculate the weighted average price are post rights issue, so will differ to those stated in fair

values tables as fair values will not change.

The exercise price of all awards except those disclosed in the above table is £nil.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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22. SHARE INCENTIVE SCHEMES (continued)

The number of awards exercisable at each year end and their weighted average exercise price is as follows:

Price £ Number million

2023 2022 2023 2022

Long Term Incentive Plan – – – 0.1

Restricted Stock Unit – – 0.2 –

Restricted Share Plan – – – –

Save As You Earn scheme 5.62 6.76 1.3 1.1

Deferred Annual Bonus Plan – – – –

1.5 1.2

The weighted average remaining contractual life for each class of share award at 30 September 2023

is as follows:

Years

2023 2022

Long Term Incentive Plan 7.3 7.4

Restricted Stock Unit 8.5 8.7

Restricted Share Plan 8.9 9.4

Save As You Earn scheme 2.5 2.9

Deferred Annual Bonus Plan 9.2 –

Share Incentive Plan

The plan is open to all employees on the UK payroll. Participants may invest up to £1,800 of their pre-tax

salary each year to purchase Partnership Shares in easyJet. Employees must remain with easyJet for

three years from the date of purchase of each Partnership Share in order to qualify for the Matching

Share, and for five years for the shares to be transferred to them tax free. The employee is entitled to

dividends on shares purchased, and to vote at shareholder meetings. With effect from 1 April 2020,

easyJet paused contributing a Matching Share to the scheme as a result of the financial constraints of

the business.

Subject to Company performance, easyJet also issues free shares to UK employees under an approved

share incentive plan of up to £3,000 per annum in value. There is a similar unapproved free shares

scheme for international employees.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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22. SHARE INCENTIVE SCHEMES (continued)

The fair value of grants under the Save As You Earn scheme are calculated by applying the Binomial Lattice option pricing model. The fair value of grants

under the TSR based Long Term Incentive Plan is estimated under the Stochastic model (also known as the Monte Carlo model). The fair value of grants under

all other schemes is the share price on the date of grant. The following assumptions are used:

Grant date

price

Exercise

price

Expected

volatility

Option

life

years

Risk-free

interest rate

Dividend yield

assumption

Fair

value

Restricted Stock Unit

12 December 2022 3.84 – 0% – 0% – 3.84

Restricted Share Plan

12 December 2022 3.84 – 0% – 0% – 3.84

21 June 2023 5.04 – 0% – 0% – 5.04

Save As You Earn scheme

19 July 2023 5.09 4.07 61% 3.50 5% 2.5% 2.47

Deferred Annual Bonus Plan

12 December 2022 3.25 – 0% – 0% – 3.25

Share price for LTIPs is the closing share price from the last working day prior to the date of grant.

Expected volatility is based on historical volatility over a period comparable to the expected life of each type of option.

The total share-based payment expense recognised for the year was £18 million (2022: £26 million). The share-based payment liability, representing the

national insurance payments due, as at 30 September 2023, was £2 million (2022: £nil million).

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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23. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO CASH GENERATED FROM OPERATIONS

2023

£ million

2022

(re-presented)

£ million

Operating profit/(loss) 453 (27)

Adjustments for non-cash items:

Depreciation 644 539

Loss on disposal of property, plant and equipment 14 7

Loss on sale and leaseback – 21

Amortisation of intangible assets 29 25

Share-based payments 18 26

Loss on disposal of other intangible assets 3 10

Changes in working capital and other items of an operating nature:

Increase in trade and other receivables (16) (151)

Increase in current intangible assets (179) (43)

Increase in trade and other payables

120 312

Increase in unearned revenue 458 197

Post employment benefit contributions (2) (1)

Decrease in provisions

(7) (61)

(Increase)/decrease in other non-current assets (40) 64

Increase/(decrease) in derivative financial instruments 14 (26)

Cash generated from operations 1,509 892

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

24. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET CASH/(DEBT)

1 October

2022

£ million

Foreign

exchange

£ million

New debt

raised in the

year

£ million

Other

£ million

Net

cash flow

£ million

30 September

2023

£ million

Cash and cash equivalents 3,514 (168) – – (421) 2,925

Money market deposits 126 – – – (126) –

3,640 (168) – – (547) 2,925

Eurobond (2,356) 28 – (11) 444 (1,895)

Term loan (UK Export Finance

backed facility) (841) 105 – (12) 748 –

Lease liabilities (1,113) 94 (126) (62) 218 (989)

(4, 31 0) 227 (126) (85) 1,410 (2,884)

Net (debt)/cash (670) 59 (126) (85) 863 41

1) Other includes deferred fees, lease extensions and rate changes.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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25. FINANCIAL INSTRUMENTS

The fair values of financial assets and liabilities, together with the carrying value at each reporting date, are as follows:

At 30 September 2023

Amortised cost Held at fair value

Financial

assets

£ million

Financial

liabilities

£ million

Fair value

hedge

£ million

Cash flow

hedge

£ million

Other financial

instruments

£ million

Other

£ million

Carrying

value

£ million

Fair

value

£ million

Other non-current assets 138 – – – – – 138 138

Trade and other receivables 237 – – – – 106 343 343

Trade and other payables

– (1,102) – – – (662) (1,764) (1,764)

Derivative financial instruments – – – 142 11 – 153 153

Restricted cash 2 – – – – – 2 2

Money market deposits – – – – – – – –

Cash and cash equivalents 1,968 – – – 957 – 2,925 2,925

Eurobonds

– (1,895) – – – – (1,895) (1,756)

Other borrowings

– – – – – – – –

Lease liabilities – (989) – – – – (989) n/a

Equity investment

– – – – 31 – 31 31

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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25. FINANCIAL INSTRUMENTS (continued)

At 30 September 2022

Amortised cost Held at fair value (Re-presented)

Financial

assets

£ million

Financial

liabilities

£ million

Fair value

hedge

£ million

Cash flow

hedge

£ million

Other financial

instruments

£ million

Other

£ million

Carrying

value

£ million

Fair

value

£ million

Other non-current assets 91 – – – – – 91 91

Trade and other receivables 230 – – – – 137 367 367

Trade and other payables

2, 6

– (1,077) – – – (682) (1,759) (1,759)

Derivative financial instruments – – 58 264 120 – 442 442

Restricted cash 7 – – – – – 7 7

Money market deposits 126 – – – – – 126 126

Cash and cash equivalents 2,528 – – – 986 – 3,514 3,514

Eurobonds

– (2,356) – – – – (2,356) (2,081)

Other borrowings

– (841) – – – – (841) (841)

Lease liabilities – (1,113) – – – – (1,113) n/a

Equity investment

– – – – 31 – 31 31

1) Amounts disclosed in the ‘Other’ column are items that do not meet the definition of a financial instrument. They are disclosed to facilitate reconciliation of the carrying values of financial instruments to line items presented in the statement of

financial position.

2) During the year ended 30 September 2022, £322 million of obligations under the ETS scheme were presented as a financial liability within Trade and other payables. During the year ended 30 September 2023, management concluded these

obligations are a non-financial liability and have presented the current year obligations of £426 million within the ‘Other’ column. The prior year has been re-presented on a consistent basis, resulting in reclassification of £322 million from the Financial

liabilities column to Other within Trade and other payables.

3) For further information see Capital, financing and interest risk management section below in note 26.

4) The equity investment of £31 million (2022: £31 million) represents a 13.2% shareholding in a non‐listed entity, The Airline Group Limited. Valuation movements are designated as being fair valued through other comprehensive income due to the nature

of the investment being held for strategic purposes. No dividend was received during the year (2022: £nil).

5) n/a – lease liabilities are valued in accordance with IFRS 16 and a fair value determination is not applicable.

6) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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25. FINANCIAL INSTRUMENTS (continued)

Fair value calculation methodology

Where available the fair values of financial instruments have been determined by reference to

observable market prices where the instruments are traded. Where market prices are not available, the

fair value has been estimated by discounting expected future cash flows at prevailing interest rates and

by applying year end exchange rates (excluding The Airline Group Limited equity investment).

The fair values of the remaining three Eurobonds are classified as level 1 of the IFRS 13 ‘Fair Value

Measurement’ fair value hierarchy (valuations taken as the closing market trade price for each respective

Eurobond as of 30 September 2023). Apart from the equity investment, the remaining financial

instruments for which fair value is disclosed in the table above, and derivative financial instruments, are

classified as level 2.

The fair values of derivatives are calculated using observable market forward curves (e.g. forward foreign

exchange rates, forward interest rates or forward jet fuel prices) and discounted to present value using

risk free rates. The impacts of counterparty credit, cross-currency basis and market volatility are also

included where appropriate as part of the fair valuation.

The equity investment is classified as level 3 due to the use of forecast dividends which are discounted

to present value. Though there are other level 2 inputs to the valuation, the discounted cash flow is a

significant input which is not based on observable market data. The fair value is assessed at each

reporting date based on the discounted cash flows and two other valuations calculated using a market

approach and level 2 inputs. The fair value is being held at £31 million (2022: £31 million) based on a

valuation report using this method by an external valuation firm which had no material increase in

valuation during the year. If the level 3 forecast cash flows were 10% higher or lower the fair value would

not increase/decrease by a material amount.

The fair value measurement hierarchy levels have been defined as follows:

> Level 1, fair value of financial instruments based on quoted prices (unadjusted) in active markets for

identical assets or liabilities.

> Level 2, fair value of financial instruments in an active market (for example, over the counter

derivatives) which are determined using valuation techniques which maximise the use of observable

market data and rely as little as possible on entity specific estimates.

> Level 3, fair value of financial instruments that are not based on observable market data (i.e.

unobservable inputs).

Fair value of derivative financial instruments

At 30 September 2023

Quantity

million

Non-current

assets

£ million

Current

assets

£ million

Current

liabilities

£ million

Non-current

liabilities

£ million

Total

£ million

Designated as cash flow hedges

US dollar 1,820 5 22 (11) – 16

Euro 1,446 – 11 (3) (2) 6

Swiss franc 241 – 2 (1) – 1

Jet fuel 2 7 123 (1) – 129

Cross-currency interest rate swaps 1,406 10 – (12) (8) (10)

Designated as fair value through

profit or loss

US dollar 1,195 13 28 (14) (4) 23

Euro 619 – – (12) – (12)

35 186 (54) (14) 153

At 30 September 2022

Quantity

million

Non-current

assets

£ million

Current

assets

£ million

Current

liabilities

£ million

Non-current

liabilities

£ million

Total

£ million

Designated as cash flow hedges

US dollar 1,721 18 170 – – 188

Euro 675 – 2 (12) (3) (13)

Swiss franc 185 – – (9) (2) (11)

Jet fuel 1 – 139 (65) (17) 57

Cross-currency interest rate swaps 1,230 42 – – – 42

Designated as fair value hedges

Cross-currency interest rate swaps 379 – 58 – – 58

Designated as fair value through

profit or loss

US dollar 755 67 45 – – 112

Euro 285 – 9 – – 9

127 423 (86) (22) 442

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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25. FINANCIAL INSTRUMENTS (continued)

For foreign currency forward exchange contracts, quantity represents the absolute gross nominal value

of currency contracts held, disclosed in the contract foreign currency. The cross-currency interest rate

swap contracts are presented at the sterling notional amount. For jet fuel derivative contracts, the

quantity represents absolute contracted metric tonnes.

The majority of foreign exchange and jet fuel transactions designated as a cash flow hedge are expected

to occur within the next 18 months. Accumulated gains and losses resulting from these transactions are

deferred in the hedging reserve. The gains and losses will be recognised in the income statement in the

periods when the hedged transactions impact the income statement. Where the gain or loss is included

in the initial amount recognised following the purchase of an aircraft, recognition in the income

statement is over a period of up to 23 years in the form of depreciation of the purchased asset.

Amounts related to US dollar and euro foreign exchange derivatives held at fair value through profit or

loss (e.g. not held in a hedge accounting relationship) form part of the Group’s statement of financial

position retranslation risk management strategy. Fair value movements on these derivatives are

recognised in the income statement and offset foreign exchange movements on the corresponding

notional amount of the statement of financial position monetary liabilities held in US dollar and euro.

These trades are all expected to occur within the next 36 months.

The Group maintains cross-currency interest rate swap contracts on a proportion of fixed rate debt

issuance as part of the approach to currency and interest rate risk management. The remaining

cross-currency interest rate swap contracts are designated and qualify as cash flow hedges to minimise

volatility in the income statement. The cross-currency interest rate swap contracts designated as fair

value have been settled in the period.

The following derivative financial instruments are subject to offsetting, enforceable master netting

arrangements.

At 30 September 2023

Gross

amount

£ million

Amount

not set off

£ million

Net

amount

£ million

Derivative financial instruments

Assets 221 (66) 155

Liabilities (68) 66 (2)

153 – 153

At 30 September 2022

Gross

amount

£ million

Amount

not set off

£ million

Net

amount

£ million

Derivative financial instruments

Assets 550 (108) 442

Liabilities (108) 108 –

442 – 442

All financial assets and liabilities are presented gross on the face of the statement of financial position as

the conditions for netting specified in IAS 32 ‘Financial Instruments Presentation’ are not met.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT

easyJet is exposed to financial risks including fluctuations in exchange rates, jet fuel prices and interest rates. Financial risk management aims to limit these market risks with selected derivative hedging instruments

being used for this purpose. easyJet’s policy is not to speculatively trade derivatives but use the instruments to hedge anticipated exposure and gain cash flow certainty. easyJet reduces its exposure to market risk

by using derivatives as any gains and losses arising are offset by the outcome of the underlying exposure being hedged.

The Board is responsible for setting financial risk and capital management policies and objectives which are implemented by the treasury function on a day-to-day basis. The policy outlines the approach to risk

management and also states the instruments and time periods which the treasury function is authorised to use in managing financial risks. The policy is regularly reviewed to ensure best practice.

Capital employed comprises shareholders’ equity (excluding hedging and cost of hedging reserves), borrowings (including amounts related to IFRS 16 lease liability), cash and money market deposits (excluding

restricted cash).

In addition, easyJet also maintains committed access to capital through its undrawn credit facilities. This amounted to £1.8 billion at 30 September 2023 (2022 £1.1 billion) and contributed to easyJet’s total liquidity.

Consequently, the capital employed at the end of the current and prior year and the return earned during those years were as follows:

2023 2022 (restated)

Headline

£ million

Non-headline

£ million

Total

£ million

Headline

£ million

Non-headline

£ million

Total

£ million

Opening capital employed

Shareholders’ equity (excluding hedging and cost of hedging reserves) 2,358 – 2,358 2,484 – 2,484

Borrowings 3,197 – 3,197 3,367 – 3,367

Lease liabilities 1,113 – 1,113 1,079 – 1,079

Cash and money market deposits (excluding restricted cash) (3,640) – (3,640) (3,536) – (3,536)

Reported capital employed 3,028 – 3,028 3,394 – 3,394

Closing capital employed

Shareholders’ equity (excluding hedging and cost of hedging reserves) 2,676 – 2,676 2,358 – 2,358

Borrowings 1,895 – 1,895 3,197 – 3,197

Lease liabilities 989 – 989 1,113 – 1,113

Cash and money market deposits (excluding restricted cash) (2,925) – (2,925) (3,640) – (3,640)

Reported capital employed 2,635 – 2,635 3,028 – 3,028

Average capital employed 2,832 – 2,832 3,211 – 3,211

Reported operating profit/(loss) 476 (23) 453 3 (30) (27)

UK corporation tax rate 25% 19%

Normalised operating profit/(loss) after tax 357 (17) 340 2 (24) (22)

Return on capital employed 12.6% 12.0% 0.1% (0.7)%

1) Return on capital employed has been restated to exclude the hedging and cost of hedging reserves. Return on capital employed is calculated by dividing the normalised operating profit/(loss) after tax by the average of the opening and closing

capital employed.

Return on capital employed is calculated by dividing the adjusted operating profit/(loss) after tax by the average of the opening and closing capital employed.

Normalised operating profit is reported operating profit, less tax at the prevailing UK corporation tax rate at the end of the financial year.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)

Liquidity risk management

The objective of easyJet’s liquidity risk management is to ensure sufficient cash is available to meet

future liabilities as they fall due and ensure access to cost effective funding in various markets.

Liquidity raised in the year was primarily from sale and leaseback transactions, which were conducted on

eight aircraft generating gross cash proceeds of £77 million. Repayments in the year included the €500

million repayment of the Feb-16 Eurobond in February 2023 and a $950 million repayment of the drawn

element of the UKEF facility in June 2023, where the $1,770 million facility was terminated and replaced

with a new five-year sustainability linked undrawn UKEF facility of $1,750 million. There were no plans to

draw this facility as at 30 September 2023.

Further to the above repayments, the Oct-16 €500 million Eurobond was repaid in October 2023 and is

therefore still present in the financial statements as at the year end.

easyJet’s policy has consistently been to hold significant liquidity to mitigate the impact of potential

business disruption events. Throughout the year, easyJet’s target minimum liquidity requirement was to

cover unearned revenue plus £500 million. In assessing this liquidity metric any undrawn credit facilities

need to be taken into consideration. Total cash (excluding restricted cash) and money market deposits

at 30 September 2023 was £2,925 million (30 September 2022: £3,640 million) with total liquidity at

£4,686 million. Surplus funds are invested in high quality short-term liquid instruments, mainly money

market funds, bank deposits and tri-party repos.

The maturity profile of financial liabilities and derivatives based on undiscounted cash flows and

contractual maturities is as follows:

At 30 September 2023

Within one year

£ million

One–two years

£ million

Two–five years

£ million

Over five years

£ million

Borrowings principal and interest 458 457 1,087 –

Trade and other payables 1,764 – – –

Lease liabilities 254 412 278 139

FX and jet derivative contracts – receipts (4,543) (961) (223) –

FX and jet derivative contracts – payments 4,334 938 222 –

Cross-currency swap contracts – receipts (452) (447) (544) –

Cross-currency swap contracts – payments 476 469 556 –

At 30 September 2022 (re-presented)

Within one year

£ million

One–two years

£ million

Two–five years

£ million

Over five years

£ million

Borrowings principal and interest 523 566 1,368 1,075

Trade and other payables

1,759 – – –

Lease liabilities 297 443 280 258

FX and jet derivative contracts – receipts (2,723) (582) (186) –

FX and jet derivative contracts – payments 2,271 503 162 –

Cross-currency swap contracts – receipts (463) (455) (463) (358)

Cross-currency swap contracts – payments 420 471 484 346

1) The liability for compensation and reimbursements for airline customer delays and cancellations has been re-presented

from provisions for liabilities and charges to liabilities within other payables. Refer to note 1a for further detail.

The maturity profile has been calculated based on spot rates for the US dollar, euro, Swiss franc and jet

fuel at close of business on 30 September each year.

Credit risk management

easyJet is exposed to credit risk arising from cash and money market deposits, derivative financial

instruments and trade and other receivables. Credit risk management aims to reduce the risk of default

by setting limits on credit exposure to counterparties based on their respective credit ratings. Credit

ratings also determine the maximum period of investment when placing funds on deposit. The maximum

exposure to credit risk at the reporting date is equal to the carrying value of its financial assets, excluding

tri-party repos, which are securitised by high-quality, investment-grade financial assets.

Counterparties for cash investments and derivatives contracts are required to have a long-term credit

rating of A- or better at contract inception from either Moody’s, Standard & Poor’s or Fitch (except

where there is a specific regulatory, contractual requirement or a bank guarantee from an A- rated

entity). Exposures to these counterparties are regularly reviewed and, if the long-term credit rating falls

below A-, management will make a decision on remedial action to be taken.

The credit ratings of counterparties that easyJet holds financial assets with are as follows:

At 30 September 2023

A- and above

£ million

Below A-

£ million

Unrated/other

£ million £ million

Financial assets

Trade receivables – – 343 343

Other non-current assets – – 138 138

Derivative financial instruments 153 – – 153

Restricted cash 2 – – 2

Cash and cash equivalents 2,922 3 – 2,925

Tota l 3,077 3 481 3,561

At 30 September 2022

A- and above

£ million

Below A-

£ million

Unrated/other

£ million £ million

Financial assets

Trade receivables – – 367 367

Other non-current assets – – 91 91

Derivative financial instruments 442 – – 442

Restricted cash 7 – – 7

Money market deposits 126 – – 126

Cash and cash equivalents 3,511 3 – 3,514

Tota l 4,086 3 458 4,547

At the end of each reporting date easyJet recognises a loss allowance for expected credit losses on

financial assets measured at amortised cost. In establishing the appropriate amount of loss allowance to

be recognised, easyJet applies either the general approach or the simplified approach, depending on the

nature of the underlying group of financial assets. See note 1a for further detail.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)

The general approach is applied to the impairment assessment of refundable lease deposits and other

refundable lease contributions, restricted cash, money market deposits and cash and cash equivalents

(excluding money market funds held at fair value through profit or loss). At 30 September 2023, the

expected credit loss was considered immaterial. This is due to easyJet’s strict policy of investing only

with counterparties who hold a high, investment grade credit standing (except in specific circumstances)

as detailed in the tables above.

The simplified approach is applied to the impairment assessment of trade and other receivables.

At 30 September 2023, trade receivables had a total loss allowance of £5 million (2022: £8 million).

The exposure to individual customer’s credit risk is reduced as no individual customer accounts for a

substantial amount of the total revenue and most payments for flight tickets are collected in advance

of the service being provided.

Foreign currency risk management

The majority of easyJet’s exposure to currency arises from fluctuations in the US dollar, euro and Swiss

franc exchange rates which can significantly impact easyJet’s financial results and cash flows. The aim of

easyJet’s foreign currency risk management is to reduce the impact of these exchange rate fluctuations.

easyJet has maintained hedging in line with policy throughout the year, with the exception of revenue

hedging (Swiss franc and euro income) where exposures were hedged in line with policy from January

2023 onwards after hedging was paused during the pandemic.

Significant currency exposures in the income statement are managed through the use of currency

forward contracts entered into cash flow hedge relationships in line with the Board approved policy.

Throughout the year easyJet hedged operational US dollar, euro, and Swiss franc exposures to an 18

month hedging policy (Swiss franc and euro exposures from January 2023, as above) with the aim of

maintaining average cover of c.60% over a rolling 12-month period.

Of note, the Group separately manages foreign exchange risk related to forecast cash outflows

associated with package holiday costs. Significant currency exposures relating to the acquisition cost of

aircraft are managed through the use of FX forward contracts where up to 36 months of forecasted

cash flows may be hedged.

easyJet has monetary liabilities denominated in US dollars and euros, which are largely offset by holding

US dollar and euro cash, and money market deposits. FX forward contracts are also used to manage

foreign exchange translation risk. These are classified as fair value through profit or loss (e.g. not

designated in a hedge relationship). During the year, easyJet used euro lease liabilities to hedge a

proportion of its euro revenue receipts in a cash flow hedge relationship. Revaluations of these euro

liabilities are held in reserves and released on a straight-line basis over the term of the lease agreement

through profit or loss.

Management may take action to hedge other currency exposures as deemed appropriate.

The gross notional of transactions in a hedge relationship that occurred during the financial year to

manage the foreign currency risk and the resulting gains and losses were as follows:

FY23

Notional

£m

Gain/(loss)

£m

USD 1,634 14

EUR 1,091 (8)

CHF 192 (2)

Notional value reflects the sterling contractual leg amount.

Capital financing and interest rate risk management

The objective of capital management is to ensure that easyJet is able to continue as a going concern

whilst delivering shareholder expectations of a strong capital base as well as returning benefits for other

stakeholders.

On 30 September 2023, easyJet held long-term corporate credit ratings from both Standard & Poor’s

(BBB) and Moody’s (Baa3).

easyJet plc established a £3,000 million Euro Medium Term Note (EMTN) Programme on 7 January 2016.

Subsequently easyJet plc has issued three bonds under this programme, one of which has been repaid,

and easyJet FinCo B.V. has issued one bond. The three remaining bonds under this scheme are

guaranteed by easyJet Airline Company Limited, easyJet plc and easyJet FinCo B.V.

On 11 February 2022, the EMTN Programme increased in size to £4,000 million.

In February 2016, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme

guaranteed by easyJet Airline Company Limited. The Eurobond had a seven-year term and paid an

annual fixed coupon of 1.750%. At the same time the Group entered into three cross-currency interest

rate swaps to convert the entire €500 million fixed rate Eurobond to a sterling floating rate exposure.

In February 2023, this bond reached maturity and was settled, with a corresponding gain realised on

settlement of the cross-currency swap.

In October 2016, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme

guaranteed by easyJet Airline Company Limited. The Eurobond has a seven-year term and pays an

annual fixed coupon of 1.125%. Shortly after the issuance of the €500 million bond the Group entered

into three cross-currency interest rate swaps to convert the entire €500 million fixed rate Eurobond to a

sterling fixed rate exposure. The cross-currency interest rate swaps were executed in November 2016

with settlement and notional exchange occurring in the same month. All three swaps pay fixed interest

semi-annually, receive fixed interest annually, and have maturities matching the Eurobond. The Group

designated all three cross-currency interest rate swaps as a cash flow hedge of the currency risk on the

€500 million Eurobond. The cross-currency interest rate swaps are measured at fair value with the

effective portion taken through the statement of comprehensive income. The element of the fair value

generated by the change in the spot rate is recycled to the income statement from the statement of

comprehensive income to offset the revaluation of the Eurobond. The carrying value of the fixed rate

Eurobond net of the cross-currency interest rate swap at 30 September 2023 was £445 million. This

value does not include capitalised set-up costs incurred in the issuing of the bond. This bond was repaid

in October 2023.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)

In June 2019, easyJet plc issued a €500 million bond under the £3,000 million EMTN Programme

guaranteed by easyJet Airline Company Limited. The Eurobond is for a six-year term and pays an annual

fixed coupon of 0.875%. At the same time the Group entered into three cross-currency interest rate

swaps to convert the entire €500 million fixed rate Eurobond to a sterling fixed rate exposure. All three

swaps pay fixed interest semi-annually, receive fixed interest annually, and have maturities matching the

Eurobond. The Group designated all three cross-currency interest rate swaps as a cash flow hedge of the

currency risk on the €500 million Eurobond. The cross-currency interest rate swaps are measured at fair

value with the effective portion taken through the statement of comprehensive income. The element of

the fair value generated by the change in the spot rate is recycled to the income statement from the

statement of comprehensive income to offset the revaluation of the Eurobond. The carrying value of the

fixed rate Eurobond net of the cross-currency interest rate swap at 30 September 2023 was £441 million.

This value does not include capitalised set-up costs incurred in the issuing of the bond.

In March 2021, easyJet FinCo B.V. issued a €1,200 million bond under the £3,000 million EMTN

Programme guaranteed by easyJet Airline Company Limited and easyJet plc. The Eurobond has a

seven-year term and pays an annual fixed coupon of 1.875%. easyJet subsequently entered into four

cross-currency interest rate swaps to convert €600 million of the fixed rate Eurobond to a sterling fixed

rate exposure. All four swaps pay fixed interest semi-annually, receive fixed interest annually, and have

maturities matching the Eurobond. The Group designated these cross-currency interest rate swaps as a

cash flow hedge of the currency risk on the €1,200 million Eurobond. The cross-currency interest rate

swaps are measured at fair value with the effective portion taken through the statement of

comprehensive income. The element of the fair value generated by the change in the spot rate is

recycled to the income statement from the statement of comprehensive income to offset the

revaluation of the Eurobond. The carrying value of the hedged element of the fixed rate Eurobond net

of the cross-currency interest rate swap at 30 September 2023 was £1,031 million. This value does not

include capitalised set-up costs incurred in the issuing of the bond.

The weighted average sterling interest rate hedged for the three bonds was 2.59% with a weighted

average GBP/EUR foreign exchange hedge rate of 1.14.

Interest rate cash flow risk arises on floating rate borrowings and cash investments.

Interest Rate Risk Management Policy aims to provide certainty in a proportion of financing while

retaining the opportunity to benefit from interest rate reductions. Borrowings are issued at either fixed or

floating interest rates, repricing every three to six months. A significant proportion of the US dollar debt

liabilities are matched with US dollar cash assets by value. Operating leases are a mix of fixed and

floating rates. Of the 153 aircraft operating leases in place at 30 September 2023 (2022: 142), 95% were

based on fixed interest rates and 5% were based on floating interest rates (2022: 95% fixed, 5% floating).

In addition, easyJet has access to facilities which are fully undrawn at 30 September 2023; a $400

million Revolving Credit Facility due to mature in September 2025 (with potential extension to September

2026), and a $1,750 million UKEF backed facility maturing in June 2028.

Commodity price risk management

The Group is exposed to commodity risk in the form of jet fuel requirements and Carbon Emissions

Trading schemes (EU ETS, CH ETS and UK ETS) price risk. easyJet has maintained risk management

activities throughout the year in line with policy.

The objective of the fuel price risk management policy is to provide protection against sudden and

significant increases in jet fuel prices, thus mitigating volatility in the income statement in the short term.

In the year, easyJet hedged in line with its 18-month hedging policy with the aim of maintaining average

cover of c.60% over a rolling 12-month period. Jet fuel derivatives are entered into a cash flow hedge

relationship against the future forecasted jet fuel usage. Treasury strategies and actions will be driven by

the need to meet treasury, financial and corporate objectives.

The volume of effective hedge transactions that occurred during the financial year to manage the jet

commodity price risk was 1.9 million metric tonnes. This resulted in a £68 million gain (2022: £581 million

gain) in the fuel line within the income statement.

The Group has a requirement to comply with EU ETS, CH ETS and UK ETS regulations and report on an

annual basis to the relevant environmental agencies. In addition to being in receipt of free allowances,

easyJet is required to purchase carbon allowances on the open market to fulfil this requirement and is

exposed to price movements that can introduce cash flow volatility. To mitigate this exposure easyJet

purchases its requirements on a spot or forward basis up to 24 months in advance. easyJet holds

allowances for 100% of all estimated ETS obligations for calendar year 2023.

ETS allowance spot and forward contracts maturing in the year were not classified as financial

instruments as they fell within the own use provision under IFRS 9.

Market risk sensitivity analysis

Financial assets and liabilities affected by market risk include borrowings, deposits, trade and other

receivables, trade and other payables, and derivative financial instruments. The following analysis

illustrates the sensitivity of changes in relevant foreign exchange rates, interest rates and fuel prices. It

should be noted that the analysis reflects the impact on profit or loss after tax for the year and other

comprehensive income on financial instruments in a cash flow hedge relationship held at the reporting

date. The sensitivities are calculated based on all other variables remaining constant. The analysis is

considered representative of easyJet’s exposure over the next 12-month period.

The sensitivity analysis is based on easyJet’s financial assets and liabilities and financial instruments held

as at 30 September 2023.

The currency exchange rate analysis assumes a +/-10% change in both US dollar and euro exchange rates.

The interest rate analysis assumes a 1% increase in interest rates over the next 12 months.

The fuel price analysis assumes a 10% increase in the fuel price forward curve over the next 12 months.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)

At 30 September 2023

Currency rates

US dollar +10%

£ million

US dollar -10%

£ million

Euro +10%

£ million

Euro -10%

£ million

Interest rates

1% increase

£ million

Fuel price 10%

increase

£ million

Income statement impact: gain/(loss) (6) 5 7 (6) 21 –

Impact on other comprehensive income: increase/(decrease) 135 (110) 3 (2) – 93

At 30 September 2022

Currency rates

US dollar +10%

£ million

US dollar -10%

£ million

Euro +10%

£ million

Euro -10%

£ million

Interest rates

1% increase

£ million

Fuel price 10%

increase

£ million

Income statement impact: gain/(loss) (18) 14 33 (27) 19 –

Impact on other comprehensive income: increase/(decrease) 145 (119) (39) 32 – 113

1) GBP weakened.

2) GBP strengthened.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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26. FINANCIAL RISK AND CAPITAL MANAGEMENT (continued)

The market risk sensitivity analysis has been calculated on spot rates for the US dollar, euro and jet fuel

at close of business on 30 September each year.

Impact on the financial statements during the year ended 30 September 2023

Details of major hedging arrangements at the reporting date are set out below, broken down by the

cash maturity of hedge instruments, notional and average rates.

Hedge instrument (notional in millions)

Within

one year

Greater than

one year

Jet fuel hedged notional 1 –

Average hedge rate 844 824

USD foreign exchange hedged notional 1,246 177

Average hedge rate 1.23 1.25

EUR foreign exchange hedged notional 568 57

Average hedge rate 1.13 1.13

CHF foreign exchange hedged notional 199 22

Average hedge rate 1.09 1.07

Notional expressed in the sterling contractual leg for currencies and metric tonnes for jet fuel.

Hedge discontinuation and ineffectiveness

Hedge effectiveness testing on all relationships is performed at each reporting date. Whilst the critical

terms matching of the Group’s hedge relationships means that any ineffectiveness should be minimal, it

can be driven by factors such as material changes in credit risk, price fixing basis (in the case of jet fuel)

or changes in the timings of the hedged cash flows.

In the year ended 30 September 2023, there were no occasions where easyJet’s hedges exceeded

forecasted exposures and therefore no hedge discontinuation took place.

All hedge relationships where the underlying exposure is still anticipated to occur continue to exhibit a

strong economic hedge relationship as the changes in fair value of hypothetical hedged items is

materially offset by the changes in the fair value of hedging instruments.

Additionally, fair value adjustments of £1 million loss (2022: £1 million gain) were recorded during the

period related to hedge ineffectiveness on hedges of foreign currency denominated borrowings that

continue to be effective hedge relationships.

27. CONTINGENT LIABILITIES AND COMMITMENTS

Contingent liabilities

easyJet is involved in a number of disputes and litigation cases which arose in the normal course of

business. The potential outcome of these disputes and litigations can cover a range of scenarios, and in

complex cases reliable estimates of any potential obligation may not be possible.

easyJet has previously disclosed an investigation by the Information Commissioner’s Office (ICO) into a

cyberattack and subsequent data breach that took place in 2020. The ICO has advised in this financial

year that no further action will be taken and the investigation against easyJet is now closed. Due to the

uncertainty surrounding the investigation no provision had been made for an estimated outcome from

the case, and as such there is no impact on the financial statements of the ICO’s decision to close the

investigation. Although the ICO investigation is closed, the associated class action filed in May 2020 in

the UK High Court by a law firm representing a class of customers affected by the data breach arising

from the cyberattack, remains in place. Similarly, other claims have been commenced or are threatened

in certain other courts and jurisdictions. The merit, likely outcome and potential impact of these actions

are subject to significant uncertainties and therefore the Group is unable to currently assess the likely

outcome or quantum of the claims, and as such a provision is not included in these financial statements.

Additionally, there is a possibility of a claim being made by a third-party supplier, for what would be a

material recovery. Management have assessed the likelihood of a case being brought, easyJet’s response

and likelihood of a successful defence, and at this stage do not consider it appropriate to provide for

such a possibility.

Contingent commitments

Letters of credit and performance bonds

At 30 September 2023, easyJet had outstanding letters of credit and performance bonds totalling £45

million (2022: £43 million), of which £12 million (2022: £10 million) expires within one year. The fair value

of these instruments at each year end was negligible.

No amount is recognised on the statement of financial position in respect of any of these financial

instruments as it is not probable that there will be an outflow of resources and the fair value has been

assessed to be £nil.

Aircraft orders

easyJet’s current order book with Airbus extends to calendar year 2028 and will deliver 158 aircraft (90

A320neo and 68 A321neo). This will continue the Company’s fleet modernisation, as the 156 seat A319

and some A320ceo aircraft (180 or 186 seat) leave the business and new A320neo (186 seat) and

A321neo (235 seat) aircraft enter, providing upgauging, cost and sustainability enhancements. Further,

easyJet has a commitment with CFM to purchase two LEAP engines in FY24.

In addition, easyJet has entered into conditional arrangements with Airbus to secure the delivery of a

further 157 aircraft (56 A320neo and 101 A321neo) between FY29 and FY34 as well as 100 purchase

rights (the ‘Proposed Purchase’). This provides easyJet with the ability to complete its fleet replacement

programme of A319 aircraft and replace approximately half of the A320ceo aircraft, alongside providing

the foundation for disciplined growth.

The conditional arrangement includes easyJet’s agreement with Airbus to exercise conversion rights of

35 A320neo deliveries into A321neo aircraft (the ‘Conversion’). Alongside the Proposed Purchase this

arrangement will deliver lower fuel burn, lower CO

emissions and lower operating costs per seat.

The scale of the Proposed Purchase and the Conversion means that both are conditional on shareholder

approval at a general meeting of the shareholders which will be held in December 2023.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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27. CONTINGENT LIABILITIES AND COMMITMENTS (continued)

Based on latest list prices for aircraft published in January 2018, the Proposed Purchase and the

Conversion are expected to result in an aggregate commitment of approximately $19.9 billion, which will

be spread over a number of years. The aggregate actual price for the aircraft would be substantially

lower because of certain price concessions granted by Airbus.

At the year end date easyJet had a commitment for six aircraft lease contracts, where the aircraft had

not been delivered, with a combined value of £67 million. Subsequent to 30 September 2023, two

aircraft have been delivered reducing the commitment to £45 million.

Pathway to net zero

On 26 September 2022, easyJet announced its pathway to net zero. This roadmap references several

partnerships with other commercial companies to explore certain technologies which may assist with

the overall goal to decarbonise the aviation industry. The majority of these partnerships are in fact

agreements to work together on the areas identified and do not involve a financial commitment from

easyJet other than the time and effort involved in the collaboration over an agreed period. Where there

is a signed agreement requiring a financial commitment from easyJet in the future, any future payments

are contingent on project progress or product / service delivery and are therefore not certain, hence no

liability has been recognised for these payments.

28. GOVERNMENT GRANTS AND ASSISTANCE

During the year ended 30 September 2023, easyJet Airline Company Limited continued to claim ‘activité

partielle longue durée’, long-term partial activity (APLD), a scheme implemented by the French

Government under which, subject to agreement with trade unions, it is possible to reduce the activity of

employees, within the limit of 50% of their legal working time, while maintaining a compensation funded by

the Government. The total amount claimed by easyJet companies in the year ended 30 September 2023

amounted to £3 million (2022: £8 million, received through this scheme and similar ‘furlough schemes’

operated by the Governments of Switzerland and Germany) and is offset within employee costs in the

income statement. There are no unfulfilled conditions or contingencies relating to this scheme.

On 8 January 2021, easyJet Airline Company Limited signed a five-year term loan facility of $1.87 billion

(with easyJet plc as a Guarantor), underwritten by a syndicate of banks and supported by a partial

guarantee from UK Export Finance under their Export Development Guarantee scheme. The Export

Development Guarantee scheme for commercial loans is available to qualifying UK companies, does not

carry preferential rates or require state aid approval, but does contain some restrictive covenants

including dividend payments. However, these restrictive covenants are compatible with easyJet’s existing

policies. In April 2022, easyJet repaid $100 million of this facility, reducing the overall UKEF facility size

from $1.87 billion to $1.77 billion and in June 2023 this facility was repaid and terminated. A new five-year

undrawn facility of $1.75 billion was entered into in June 2023. Embedded within the facility is a

sustainability key performance indicator linked to a reduction in carbon emission intensity in line with

easyJet’s SBTi validated target, with a margin adjustment mechanism (upward or downward) conditional

on the achievement of specific milestones. Other than the sustainability linkage the facility is on similar

terms to the 2021 agreement.

29. RELATED PARTY TRANSACTIONS

The Company licences the easyJet brand from easyGroup Limited (‘easyGroup’), a wholly owned

subsidiary of easyGroup Holdings Limited, an entity in which easyJet’s founder, Sir Stelios Haji-Ioannou,

holds a beneficial controlling interest. The Haji-Ioannou family concert party shareholding (being

easyGroup Holdings Limited and Polys Holding Limited) holds, in total, approximately 15.27% of the

issued share capital of easyJet plc as at 30 September 2023.

Under the Amended Brand Licence signed in October 2010 and approved by the shareholders of

easyJet plc in December 2010, an annual royalty of 0.25% of total revenue is payable by easyJet to

easyGroup. The full term of the agreement is 50 years.

easyJet and easyGroup established a fund to meet the annual costs of protecting the ‘easy’ (and related

marks) and the ‘easyJet’ brands. easyJet contributes up to £1 million per annum to this fund and

easyGroup contributes £100,000 per annum. If easyJet contributes more than £1 million per annum,

easyGroup will match its contribution in the ratio of 1:10 up to a limit of £5 million contributed by easyJet

and £500,000 contributed by easyGroup.

Three side letters have been entered into: (i) a letter dated 29 September 2016 in which easyGroup

consented to easyJet acquiring a portion of the equity share capital in Founders Factory Limited;

(ii) a letter dated 26 June 2017 in which easyJet’s permitted usage of the brand was slightly extended;

and (iii) a letter dated 2 February 2018 in which easyGroup agreed that certain affiliates of easyJet have

the right to use the brand.

The amounts included in the income statement, within other costs, for these items are as follows:

2023

£ million

2022

£ million

Annual royalty 20 14

Brand protection (legal fees paid through easyGroup to third parties) 1 2

21 16

At 30 September 2023, £6.0 million (2022: £11.1 million) was payable to easyGroup.

30. EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE

After the statement of financial position date of 30 September 2023,

> in October 2023, the October 2016 Eurobond of €500 million was repaid;

> in October 2023, three A319 aircraft were sold and leased back with gross proceeds of £32 million; and

> in November 2023, easyJet signed two aircraft leases with a combined value of £12 million.

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)

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COMPANY STATEMENT OF FINANCIAL POSITION

Notes

As at

30 September

2023

£ million

As at

30 September

2022

£ million

Non-current assets

Investments in subsidiary undertakings c 1,042 1,025

Amounts due from subsidiary undertakings f 3,138 2,976

Derivative financial instruments with subsidiary undertakings – 14

4,180 4,015

Current assets

Amounts due from subsidiary undertakings f 438 448

Derivative financial instruments with subsidiary undertakings – 58

438 506

Current liabilities

Borrowings d (433) (437)

Other payables (6) (11)

Derivative financial instruments with subsidiary undertakings (12) –

(451) (4 48)

Net current (liabilities)/assets (13) 58

Non-current liabilities

Borrowings d (431) (874)

Deferred tax liabilities – (5)

Derivative financial instruments with subsidiary undertakings (8) –

(439) (879)

Net assets 3,728 3,194

Notes

As at

30 September

2023

£ million

As at

30 September

2022

£ million

Shareholders’ equity

Share capital 207 207

Share premium 2,166 2,166

Hedging reserve 1 13

Cost of hedging reserve – 3

Retained earnings 1,354 805

Total equity 3,728 3,194

The financial statements on pages 189 to 193 were approved by the Board of Directors and authorised

for issue on 28 November 2023 and signed on behalf of the Board.

In accordance with Section 408 of the Companies Act 2006, the Company is exempt from the

requirement to present its own income statement and statement of comprehensive income. The

Company’s profit for the year was £532 million (2022: £72 million). Included in this amount are dividends

received of £436 million (2022: £35 million), which are recognised when the right to receive payment is

established.

Johan Lundgren Kenton Jarvis

Director Director

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COMPANY STATEMENT OF CHANGES IN EQUITY

capital

£ million

premium

£ million

Hedging

reserve

£ million

Cost of hedging

reserve

£ million

Retained

earnings

£ million

Total

equity

£ million

At 1 October 2022 207 2,166 13 3 805 3,194

Profit for the year – – – – 532 532

Other comprehensive loss – – (12) (3) – (15)

Total comprehensive income – – (12) (3) 532 517

Share incentive schemes

Movement in reserves for employee share schemes – – – – 17 17

At 30 September 2023 207 2,166 1 – 1,354 3,728

capital

£ million

premium

£ million

Hedging

reserve

£ million

Cost of hedging

reserve

£ million

Retained

earnings

£ million

Total

equity

£ million

At 1 October 2021 207 2,166 (9) 4 707 3,075

Profit for the year – – – – 72 72

Other comprehensive income/(loss) – – 22 (1) – 21

Total comprehensive income – – 22 (1) 72 93

Share incentive schemes

Movement in reserves for employee share schemes – – – – 26 26

At 30 September 2022 207 2,166 13 3 805 3,194

An ordinary dividend in respect of the year ended 30 September 2023 of 4.5 pence per share, or £34 million, based on headline profit after tax, is to be

proposed at the forthcoming Annual General Meeting. These financial statements do not reflect this proposed dividend.

The disclosures required in respect of share capital are shown in note 21 to the consolidated financial statements.

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NOTES TO THE COMPANY FINANCIAL STATEMENTS

A) SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

The financial statements of easyJet plc (the ‘Company’) have been prepared in accordance with

Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101) and the applicable legal

requirements of the Companies Act 2006 as applicable to companies using FRS 101. The financial

statements are prepared based on the historical cost convention except for certain financial assets and

liabilities, including derivative financial instruments, financial guarantees and certain contingent liabilities

and commitments, which are measured at fair value.

easyJet plc is a holding company for a group of companies engaged in providing low-cost flights and

package holidays, principally in Europe. The Company is a public limited company (company number

03959649), incorporated and domiciled in the United Kingdom, whose shares are listed on the London

Stock Exchange under the ticker symbol EZJ. The address of its registered office is Hangar 89, London

Luton Airport, Luton, Bedfordshire, LU2 9PF, England.

Statement of preparation

The financial statements have been prepared on a going concern basis; details of the going concern

assessment are provided on pages 67 and 68.

The following exemptions from the requirements of IFRS have been applied in the preparation of these

financial statements, in accordance with FRS 101:

> IFRS 7, Financial instruments: Disclosures.

> The requirements of paragraphs 45(b) and 46–52 of IFRS 2, Share-based payment.

> The requirement in paragraph 38 of IAS 1 presentation of Financial Statements to present comparative

information in respect of: paragraph 79(a)(iv) of IAS 1.

> The requirements of paragraphs 10(f), 40A, 40B, 40C, 40D, of IAS 1 Presentation of Financial

Statements.

> The following paragraphs of IAS 1, Presentation of financial statements:

– 10(d) (statement of cash flows);

– 16 (statement of compliance with all IFRS);

– 38A (requirement for minimum of two primary statements, including statement of cash flows);

– 38B–D (additional comparative information);

– 111 (statement of cash flows information); and

– 134–136 (capital management disclosures).

> IAS 7, Statement of cash flows and related notes.

> Paragraphs 91 to 99 of IFRS 13, Fair value measurement (disclosure of valuation techniques and inputs

used for fair value measurement of assets and liabilities).

> Paragraphs 30 and 31 of IAS 8, Accounting policies, changes in accounting estimates and errors

(requirement for the disclosure of information when an entity has not applied a new IFRS that has

been issued but is not yet effective).

> Paragraph 17 of IAS 24, Related party disclosures (key management compensation).

> The requirements in IAS 24, Related party disclosures, to disclose related party transactions entered

into between two or more members of a group.

The significant accounting policies applied in the preparation of these Company financial statements

are the same as those set out in note 1 to the consolidated financial statements with the addition of

the following.

Investments

Investments in subsidiaries are stated at cost, less any provision for impairment. Where subsidiary

undertakings incur charges for share-based payments in respect of share options and awards granted by

the Company (see note 22 of the consolidated financial statements), a capital contribution for the same

amount is recognised as an investment in subsidiary undertakings with a corresponding credit to

shareholders’ equity.

The recoverable amount of the investment balance and associated amounts due from the subsidiaries

have been assessed for impairment. This assessment represents a critical accounting estimate for the

Company. The cash flow projections, assumptions and stress testing are based on those disclosed in

note 10 to the consolidated financial statements. Individual risks in reasonably probable combinations,

including those associated with climate change and the current macro-economic environment, do not

give rise to an impairment. A further review as at 30 September using up to date key inputs (Fuel price

and exchange rates) and latest cash flow projections also did not give rise to an impairment.

Amounts due from/to subsidiary undertakings

Amounts due from/to subsidiary undertakings are recognised initially at fair value, and subsequently at

amortised cost using the effective interest rate method.

At each reporting date the Company recognises a loss allowance for expected credit losses on amounts

due from subsidiaries using the simplified approach. Under the simplified approach the Company

recognises a loss allowance at an amount equal to the lifetime expected credit losses.

Dividend income

Dividends received from investments in subsidiaries are recognised in the income statement when the

right to receive payment is established.

Derivative financial instruments with subsidiary undertakings

For the year ended 30 September 2023, this related to the Feb-16, Oct-16 and Jun-19 bonds as detailed in

the consolidated financial statements.

B) INCOME STATEMENT AND STATEMENT OF TOTAL COMPREHENSIVE INCOME

In accordance with Section 408 of the Companies Act 2006, the Company is exempt from the

requirement to present its own income statement and statement of comprehensive income. The

Company’s profit for the year was £532 million (2022: £72 million). Included in this amount are dividends

received of £436 million (2022: £35 million), which are recognised when the right to receive payment is

established.

The nine Non-Executive Directors of easyJet plc (2022: nine) are paid for their services by easyJet Airline

Company Limited.The Executive Directors of easyJet plcare employed and paid by easyJet Airline

Company Limited.Details of Directors’ remuneration are disclosed in note 4 to the consolidatedfinancial

statementsand in the Directors’ Remuneration Report on pages113 to 130.

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NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)

C) INVESTMENTS IN SUBSIDIARY UNDERTAKINGS

Investments in subsidiary undertakings were as follows:

2023

£ million

2022

£ million

At 1 October 1,025 999

Capital contributions to subsidiaries 17 26

At 30 September 1,042 1,025

During the year, £17 million (2022: £26 million) capital contributions of share awards (as explained in

note a) above) were provided to Group companies. No other contributions were made during the year

(2022: £nil million).

The recoverable amount of the investment balance and associated amounts due from the subsidiaries

have been assessed for impairment. The cash flow projections, assumptions and stress testing used in

this exercise are based on those disclosed in note 10 to the consolidated financial statements. Individual

risks, and risks in reasonably probable combinations, including those associated with climate change and

the current macro-economic environment, do not give rise to an impairment.

A full list of Group companies is detailed below.

Country of incorporation Principal activity

Percentage of

ordinary

shares held

easyJet Airline Company Limited

England and Wales Airline operator 100

easyJet Switzerland S.A.

Switzerland Airline operator 49*

easyJet Sterling Limited

3, 4, 9

Cayman Islands Aircraft trading and leasing 100

easyJet Leasing Limited

3, 4, 9

Cayman Islands Aircraft trading and leasing 100

easyJet UK Limited

England and Wales Airline operator 100

easyJet Europe Airline GmbH

Austria Airline operator 100

easyJet FinCo B.V.

Netherlands Financing company 100

easyJet MT Limited

Malta Insurance 100

easyJet HQ Holdings Limited

1, 8

England and Wales Holding company 100

easyJet HQ Limited

1, 8

England and Wales Development of building projects 100

easyJet HQ Development Limited

1, 8

England and Wales Development of building projects 100

easyJet Holidays Holdings Limited

England and Wales Holding company 100

easyJet Holidays Limited

England and Wales Tour operator 100

easyJet Holidays Transport Limited

England and Wales Air transport 100

1) Hangar 89, London Luton Airport, Luton, Bedfordshire, LU2 9PF, England.

2) 5 Route de l’Aeroport, Meyrin, CH-1215 Geneve 15, Switzerland.

3) Although these companies are Cayman Islands incorporated they have always been, and continue to be, UK tax resident.

4) Governor’s Square, West Bay Road, Lime Tree Bay Road, UNIT # 2-105 , PO Box 1982, Grand Cayman KY1–1104, Cayman

Islands.

5) Wagramer Stasse 19, 11.Stock IZD Tower, 1220 Wien, Austria.

6) Westerdoksdijk 423, 1013BX Amsterdam, Netherlands.

7) 188, 21st September Avenue, Naxxar, NXR 1012, Malta.

8) The following UK entities, all of which are 100% owned by the Group, are exempt from the requirement to prepare

individual financial statements by virtue of s394A of the Companies Act 2006 relating to the individual financial

statements of dormant subsidiaries: easyJet HQ Limited, (12367394), easyJet HQ Development Limited (12367361) and

easyJet HQ Holdings Limited (12366723).

9) Dissolved on 9 November 2023.

* The Company has a 49% interest in easyJet Switzerland S.A. with an option to acquire the remaining 51%. The option is

automatically extended for a further year on a rolling basis, unless the option is terminated by written agreement prior to

the automatic renewal date. easyJet Switzerland S.A. is a subsidiary on the basis that the Company exercises a dominant

influence over the undertaking. A non-controlling interest has not been reflected in the consolidated financial statements

on the basis that holders of the remaining 51% of the shares have no entitlement to any dividends from that holding and

the Company has an option to acquire those shares for a predetermined minimal consideration. The Company has 100%

of voting rights for all other subsidiaries.

There have been no changes to the percentage of ordinary shares held during the year.

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NOTES TO THE COMPANY FINANCIAL STATEMENTS (CONTINUED)

D) BORROWINGS

Current

£ million

Non-current

£ million

Total

£ million

At 30 September 2023

Eurobond 433 431 864

433 431 864

Current

£ million

Non-current

£ million

Total

£ million

At 30 September 2022

Eurobond 437 874 1,311

437 874 1,311

easyJet plc uses cross-currency interest rate swaps with subsidiary undertakings to hedge currency and

interest rate risk on borrowings and these are held at a fair value, resulting in a £20 million liability as at

30 September 2023 (2022: £72 million asset). The fair value of these is determined as described in note

25 to the consolidated financial statements.

For full details on the borrowings and financial instruments see note 17 and 25 respectively of the

consolidated financial statements.

E) GUARANTEES AND CONTINGENT LIABILITIES

The Company has given formal undertakings to the Civil Aviation Authority to guarantee the payment

and discharge of all liabilities of easyJet Airline Company Limited, a subsidiary of the Company. The

guarantees are required for that company to maintain its operating licence under Regulation 3 of the

Licensing of Air Carriers Regulations 1992, and to maintain its ATOL licence under The Civil Aviation (Air

Travel Organisers’ Licensing) Regulations 2012.

The Company has issued a guarantee in favour of easyJet Airline Company Limited, a subsidiary

undertaking, in relation to the processing of credit card transactions, and also in respect of hedging

transactions carried out in accordance with treasury policy.

The Company has guaranteed the contractual obligations of easyJet Airline Company Limited to Airbus

SAS in respect of the supply of Airbus 320 family aircraft. Details of aircraft orders are disclosed in notes

11 and 27 to the consolidated financial statements.

The Company has guaranteed jointly and severally the contractual obligations with easyJet Airline Company

Limited, a subsidiary undertaking, in respect of a $400 million Revolving Credit Facility. The Revolving Credit

Facility was agreed on 9 September 2021, for a minimum of four and a maximum of six years. In FY23 easyJet

did not to exercise the first extension option, therefore this facility now has a minimum of four and maximum

of five years.

On 8 January 2021, easyJet Airline Company Limited signed a five-year term loan facility of $1.87 billion

(with easyJet plc as a Guarantor), underwritten by a syndicate of banks and supported by a partial

guarantee from UK Export Finance under their Export Development Guarantee scheme. The Export

Development Guarantee scheme for commercial loans is available to qualifying UK companies, does not

carry preferential rates or require state aid approval, but does contain some restrictive covenants

including dividend payments. However, these restrictive covenants are compatible with easyJet’s existing

policies. In April 2022, easyJet repaid $100 million of this facility reducing the overall UKEF facility size

from $1.87 billion to $1.77 billion and in June 2023 this facility was repaid and terminated. A new five-year

undrawn facility of $1.75 billion was entered into in June 2023. . Embedded within the facility is a

sustainability key performance indicator linked to a reduction in carbon emission intensity in line with

easyJet’s SBTi validated target, with a margin adjustment mechanism (upward or downward) conditional

on the achievement of specific milestones. Other than the sustainability linkage the facility is on similar

terms to the 2021 agreement.

The Company jointly and severally with easyJet Airline Company Limited has guaranteed the repayment

of borrowings that financed the acquisition of aircraft by subsidiary undertakings. This includes the

contractual obligations of the €1.2 billion bond that was issued on 3 March 2021 by easyJet FinCo B.V.

under the Euro Medium Term Note (EMTN) Programme. The bond has a coupon of 1.875% and matures

in March 2028. The Company has also guaranteed the payment obligations for the lease of aircraft by

subsidiary undertakings.

easyJet plc has given a formal undertaking to the Civil Aviation Authority to guarantee the payment and

discharge of all liabilities of easyJet Holidays Limited and easyJet Holidays Transport Limited. The

guarantees are required for easyJet Holidays Limited and easyJet Holidays Transport Limited to maintain

ATOL licences under The Civil Aviation (Air Travel Organisers’ Licensing) Regulations 2012. easyJet plc has

also issued guarantees in favour of easyJet Holdings Limited relating to the processing of credit card

transactions and brand licence agreement with easyGroup Limited.

The Company has guaranteed certain letters of credit issued on behalf of subsidiary undertakings.

No amount is recognised on the Company statement of financial position with respect to any of these

guarantees as the fair value is deemed to be £nil per measurement under IFRS 9. The calculated loss

allowance on these financial guarantee contracts is immaterial.

F) RELATED PARTY TRANSACTIONS

Transactions with subsidiary undertakings principally relate to the provision of funding within the Group.

Apart from those relating to loans associated with the issuance of the Eurobonds, the outstanding

balances are placed on intercompany accounts with no specified credit period, are unsecured, and bear

market rates of interest. It is expected that balances will be settled when the associated funding is repaid

or via distribution of a dividend. The portion of the ‘Amounts due from subsidiary undertakings’ balance

that is expected to be settled within 12 months is classified as current.

The intercompany loan agreements associated with the issuance of the Eurobonds in October 2016

and June 2019 are on the same terms as the bonds themselves (see note 26 in the consolidated

financial statements).

For full details of the Company’s relationships with easyGroup Holdings Limited, see note 29 of the

consolidated financial statements.

G) EVENTS AFTER THE STATEMENT OF FINANCIAL POSITION DATE

The October 2016 Eurobond of €500 million was repaid in October 2023.

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FIVE-YEAR SUMMARY (UNAUDITED)

2023

£ million

2022

(as reported)

£ million

2021

(as reported)

£ million

2020

(as reported)

£ million

2019

(as reported)

£ million

Income statement

Revenue 8,171 5,769 1,458 3,009 6,385

Tota l EB IT DAR 1,126 539 (425) (358) 970

Headline EBITDAR 1,130 569 (551) (273) 970

Total operating profit/(loss) 453 (27) (910) (899) 466

Headline operating

profit /(loss) 476 3 (1,036) (777) 466

Total profit/(loss) before tax 432 (208) (1,036) (1,273) 430

Headline profit/(loss)

before tax 455 (178) (1,136) (835) 427

Total profit/(loss) after tax 324 (169) (858) (1,079) 349

Headline profit/(loss)

after tax 341 (147) (900) (725) 349

Basic total earnings/(loss)

per share – pence 43.1 (22.4) (159.0) (222.9) 88.6

Basic headline earnings/

(loss) per share – pence 45.4 (19.6) (166.9) (149.7) 88.7

Diluted total earnings/(loss)

per share – pence 42.7 (22.4) (159.0) (222.9) 87. 8

Diluted headline earnings/

(loss) per share – pence 45.0 (19.6) (166.9) (149.7) 87.8

Ordinary dividend per

share – pence 4.5 – – – 43.9

Statement of financial

position

Non-current assets 5,711 5,525 5,608 5,910 6,044

Current assets 4,130 4,929 4,165 2,563 2,119

Current liabilities (4,144) (3,678) (2,677) (3,826) (2,668)

Non-current liabilities (2,910) (4,243) (4,45 7) (2,748) (2,510)

Net assets 2,787 2,533 2,639 1,899 2,985

2023

£ million

2022

(as reported)

£ million

2021

(as reported)

£ million

2020

(as reported)

£ million

2019

(as reported)

£ million

Other performance

indicators

Headline return on capital

employed

12.6% 0.1% (25.2)% (19.2)% 11.9%

Net cash/(debt) (£m) 41 (670) (910) (1,125) (326)

Group total profit/(loss)

before tax per seat (£) 4.67 (2.55) (36.75) (23.09) 4.10

Group headline profit/(loss)

before tax per seat (£) 4.91 (2.19) (40.29) (15.16) 4.07

Airline total profit/(loss)

before tax per seat (£) 3.35 (3.01) (36.33) (22.66) 4.10

Airline headline profit/(loss)

before tax per seat (£) 3.59 (2.65) (39.87) (14.68) 4.07

Airline revenue per seat (£) 79.84 66.23 50.54 54.35 60.81

Airline headline cost

per seat (£) (76.25) (68.88) (90.41) (69.03) (56.74)

Airline headline cost per

seat excluding fuel (£) (54.30) (53.20) (7 7. 25) (55.94) (43.26)

Seats flown (millions) 92.6 81.5 28.2 55.1 105.0

1) Return on capital employed has been restated to exclude the hedging and cost of hedging reserves.

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GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES (APMS) (UNAUDITED)

Non-headline items

Non-headline items are those where, in management’s opinion, their separate

reporting provides an additional understanding to users of the financial

statements of easyJet’s underlying trading performance, and which are

significant by virtue of their size/nature (see note 5).

Headline profit/(loss)

before tax

A measure of underlying performance which is not impacted by non-headline

items.

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Statutory profit/(loss) before tax 432 (208)

Total non-headline charge before tax (see note 5) 23 30

Headline profit/(loss) before tax 455 (178)

EBITDAR

Earnings before interest, taxes, depreciation, amortisation and aircraft rental.

Headline EBITDAR

Earnings before non-headline items, interest, taxes, depreciation, amortisation,

and aircraft rental.

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Statutory operating profit/(loss) 453 (27)

Add back:

Aircraft dry leasing – 2

Depreciation 644 539

Amortisation of intangible assets 29 25

EBITDAR 1,126 539

Non-headline charge within EBITDAR (see note 5) 4 30

Headline EBITDAR 1,130 569

Net cash/(debt)

Total cash less borrowings and lease liabilities; cash includes money market

deposits but excludes restricted cash.

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Borrowings (1,895) (3,197)

Lease liabilities (989) (1,113)

Cash and money market deposits (excluding restricted cash) 2,925 3,640

Net cash/(debt) 41 (670)

Return on capital

employed (ROCE)

Profit/loss before interest and tax, applying tax at the prevailing UK corporation

tax rate at the end of the financial year, and dividing by the average capital

employed. Capital employed is shareholders equity, excluding the hedging and

cost of hedging reserves, plus net debt.

Headline return on

capital employed

(ROCE)

Headline profit/loss before interest and tax, applying tax at the prevailing UK

corporation tax rate at the end of the financial year, and dividing by the

average capital employed. Capital employed is shareholders equity, excluding

the hedging and cost of hedging reserves, plus net debt.

Year ended

30 September

2023

£ million

Year ended

30 September

2022

Restated

£ million

Average shareholders’ equity excluding hedging and cost of hedging

reserves 2,517 2,421

Average net debt 315 790

Average capital employed 2,832 3,211

Reported operating profit/(loss) 453 (27)

Tax rate 25% 19%

Adjusted operating profit/(loss) after tax 340 (22)

Return on capital employed 12.0% (0.7%)

Reported operating profit/(loss) 453 (27)

Non-headline charge within operating profit (see note 5) 23 30

Headline reported operating profit 476 3

Tax rate 25% 19%

Adjusted headline operating profit after tax 357 2

Headline return on capital employed 12.6% 0.1%

1) Average capital employed has been restated to exclude the hedging and cost of hedging reserves.

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GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES (APMS) (CONTINUED)

Basic headline (loss)/

earnings per share –

pence

Total headline loss for the year divided by the weighted average number of

shares in issue during the year after adjusting for shares held in employee

benefit trusts.

Diluted headline (loss)/

earnings per share –

pence

Total headline loss for the year divided by the weighted average number of

ordinary shares in issue adjusted to assume conversion of all dilutive potential

shares.

Year ended

30 September

2023

£ million

Year ended

30 September

2022

£ million

Total profit/(loss) after tax for the year 324 (169)

Total non-headline charge before tax (see note 5) 23 30

Tax impact of non-headline items (6) (8)

Headline profit/(loss) after tax 341 (147)

Weighted average number of ordinary shares used to calculate basic

earnings/(loss) per share 751 753

Weighted average number of ordinary shares used to calculate diluted

earnings(loss) per share 758 753

Headline earnings/(loss) per share

Basic 45.4 (19.6)

Diluted 45.0 (19.6)

Constant currency

measures

These performance measures are calculated by translating the year ended

30 September 2023 income statement at the average exchange rate for year

ended 30 September 2022, excluding any income statement impact in either

financial year from foreign currency exchange gains and losses arising from the

revaluation of the statement of financial position. The purpose of this APM is to

provide a like for like comparison of underlying operating performance by

excluding the impact of exchange rate movements.

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GLOSSARY – OTHER (UNAUDITED)

Aircraft dry/wet leasing

Dry leasing arrangements relate solely to the provision of an

aircraft. Wet leasing arrangements relate to the provision of

aircraft, crew, maintenance and insurance.

Aircraft owned/leased

at end of year

Number of aircraft owned or on lease arrangements of over one

month’s duration at the end of the period. This excludes operating

leased aircraft which have been acquired for future operations.

These are held at zero rent and are excluded from the fleet

numbers.

Available seat kilometres (ASK)

Seats flown multiplied by the number of kilometres flown.

Block hours

Hours of service for aircraft, measured from the time that the

aircraft leaves the terminal at the departure airport to the time

that it arrives at the terminal at the destination airport.

Capital employed

Shareholders’ equity excluding the hedging and cost of hedging

reserves, plus net debt.

Cash collateralisation

The process of pledging cash to serve as a lender’s protection

against a borrower’s default.

Airline cost per ASK (CASK)

Airline revenue less profit before tax, divided by available seat

kilometres.

Airline cost per seat

Airline revenue less profit before tax, divided by seats flown.

Airline cost per seat,

excluding fuel

Airline revenue, less profit before tax, adding back fuel costs,

divided by seats flown.

Airline CSAT

(customer satisfaction score)

A weighted average of responses of surveys sent to customers

who experienced either an on-time, delayed, severely delayed or

cancelled flight.

Load factor

Number of passengers as a percentage of number of seats flown.

The load factor is not weighted for the effect of varying sector

lengths.

Normalised operating

profit after tax

Reported operating profit, less tax at the prevailing UK corporation

tax rate at the end of the financial year.

Operating costs excluding fuel

Includes costs relating to airports and ground handling, crew,

navigation, maintenance, selling and marketing, and other costs/

income.

Other costs

Administrative and operational costs not reported elsewhere,

including disruption costs, IT costs, costs of third-party providers,

some employee costs, wet lease costs and insurance. Additionally,

some non-headline costs, such as loss on sale and leaseback

transactions, and restructuring costs, are included in other costs.

Other income

Includes insurance receipts, supplier compensation payments,

rental income, gains on sale of intangible assets, and gains on sale

and leaseback transactions.

Passengers

Number of earned seats flown. Earned seats comprises seats sold

to passengers (including no-shows), seats provided for

promotional purposes and seats provided to staff for business

travel.

Profit before tax per seat

Profit before tax divided by seats flown.

Revenue

The sum of passenger revenue and ancillary revenue, including

package holiday revenue.

Revenue passenger

kilometres (RPK)

Number of passengers multiplied by the number of kilometres

those passengers were flown.

Revenue per ASK (RASK)

Revenue divided by available seat kilometres.

Revenue per seat

Revenue divided by seats flown.

Seats flown

Seats available for passengers.

Sector

A one-way revenue flight.

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SHAREHOLDER INFORMATION

GO PAPERLESS

We want our shareholders to receive

communications quickly and easily, while also

reducing the impact on the environment.

Shareholders can help us do this by signing up to

receive electronic communications through

Shareview at shareview.co.uk.

Registering for Shareview is free and provides the

following benefits:

> Update your details online including your email

address and postal address.

> Add bank details so that you receive dividend

payments directly, rather than waiting for a

cheque.

> submit your voting instructions for shareholder

meetings.

> Add a range of shareholding and investments

you have (including those with other registrars)

to monitor their value all in one place.

> Buy and sell shares easily.

MANAGING YOUR SHARES

If you have further queries relating to your

shareholding, you should contact Equiniti, the

Company’s registrars, using one of the methods

listed below:

> Online: help.shareview.co.uk.

> By telephone: + 44 (0)371 384 2577. Please use

the country code if calling from outside the UK.

Lines are open Monday to Friday 8.30am to

5.30pm, excluding public holidays in England and

Wales.

> By post: Equiniti Limited, Aspect House, Spencer

Road, Lancing, West Sussex BN99 6DA.

ANNUAL GENERAL MEETING

The Board currently intends to hold the AGM

on 8 February 2024. The arrangements for the

Company’s 2024 AGM and details of the

resolutions to be proposed, together with

explanatory notes, will be set out in the Notice of

AGM to be published on the Company’s website.

DIVIDENDS

Dividends can be paid quickly and securely directly

into your bank account instead of being dispatched

to you by cheque. You can arrange for this through

Shareview at shareview.co.uk.

INDEPENDENT AUDITOR

PricewaterhouseCoopers LLP

40 Clarendon Road

Watford, Hertfordshire

WD17 1JJ

REGISTERED OFFICE

Hangar 89

London Luton Airport

Luton

Bedfordshire

LU2 9PF

Telephone: 01582 525019

Registered in England & Wales under number

03959649

SHARE PRICE INFORMATION

Details of our share price data and other share

price tools are available at corporate.easyJet.com.

SHAREGIFT

Shareholders who only have a small number of

shares whose valuation makes it uneconomic to sell

them may wish to consider donating them to charity

through ShareGift, the independent charity share

donation scheme (registered charity no. 1052686).

Further information may be obtained from ShareGift

on 020 7930 3737 or at sharegift.org.

SHAREHOLDER FRAUD

Fraud is on the increase and many shareholders

are targeted every year. If you have any reason to

believe that you may have been the target of a

fraud, or attempted fraud in relation to your

shareholding, please contact Equiniti immediately.

WEBSITE

You can access the corporate website at

corporate.easyJet.com. The corporate website

provides useful information including annual

reports, results announcements and share price

data, as well as background information about the

Company and current issues. Shareholders are

encouraged to sign up to receive email

notifications of results and press announcements

as they are released by registering on the website.

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THANK YOU

We’d like to thank everyone who has helped to produce this report:

Jane Ashton, Sruti Bajoria, Michael Barker, Deborah Benady, Maxwell Bruce, Michelle Buckle, Ross Caley, Barbara Cant, Phil Chastell, Matt Clemens, Claire Combes, Sam Cottrell, Jonathan Diec, Ian Dodd, Rhys

Evans, Holly Gardiner, Lydia Gorton, Murshad Habib, Thomas Haagensen, Karishma Haria, Alison Jackson, Kenton Jarvis, Skye John, Chloe Jones, Hayden Jones, Tuntu Kapembwa, Akshay Katyal, Menara Khatun,

Anna Knowles, Hetal Kotecha, Matt Landsman, Alex Larkin, Kate Marks, Samuel Mapungwana, Ben Matthews, Marc McKenna-Coles, Martha McLelland, Mansur Miah, Holly Mitchell, Julie Morris, Adam Mould, Atif

Nasir, Simon Nicholson, Anthony Pallant, Roshan Patel, Liz Perry, Omer Pervez, Jennifer Powell, Lauren Pye, Lahiru Ranasinghe, Megan Richards, Paul Robbins, Kelly Robinson, Sam Screpis, Raminder Shergill,

Amanda Simpson, Chris Sominka, Ben Souter, Holly Steadman, Adrian Talbot, Tim Taylor, Lisa Tsavalos, Mark Warner, Dale Weston, and all of our employees across the network.

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